Correlation Between Lendinvest PLC and Carnival PLC
Can any of the company-specific risk be diversified away by investing in both Lendinvest PLC and Carnival PLC at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lendinvest PLC and Carnival PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendinvest PLC and Carnival PLC, you can compare the effects of market volatilities on Lendinvest PLC and Carnival PLC and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lendinvest PLC with a short position of Carnival PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendinvest PLC and Carnival PLC.
Diversification Opportunities for Lendinvest PLC and Carnival PLC
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lendinvest and Carnival is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lendinvest PLC and Carnival PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival PLC and Lendinvest PLC is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lendinvest PLC are associated (or correlated) with Carnival PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival PLC has no effect on the direction of Lendinvest PLC i.e., Lendinvest PLC and Carnival PLC go up and down completely randomly.
Pair Corralation between Lendinvest PLC and Carnival PLC
Assuming the 90 days trading horizon Lendinvest PLC is expected to generate 11.89 times less return on investment than Carnival PLC. But when comparing it to its historical volatility, Lendinvest PLC is 1.81 times less risky than Carnival PLC. It trades about 0.07 of its potential returns per unit of risk. Carnival PLC is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 154,000 in Carnival PLC on September 5, 2024 and sell it today you would earn a total of 32,650 from holding Carnival PLC or generate 21.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendinvest PLC vs. Carnival PLC
Performance |
| Timeline |
| Lendinvest PLC |
| Carnival PLC |
Lendinvest PLC and Carnival PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendinvest PLC and Carnival PLC
The main advantage of trading using opposite Lendinvest PLC and Carnival PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendinvest PLC position performs unexpectedly, Carnival PLC can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Carnival PLC will offset losses from the drop in Carnival PLC's long position.| Lendinvest PLC vs. CleanTech Lithium plc | Lendinvest PLC vs. Caledonia Mining | Lendinvest PLC vs. AfriTin Mining | Lendinvest PLC vs. Anglesey Mining |
| Carnival PLC vs. Automatic Data Processing | Carnival PLC vs. Extra Space Storage | Carnival PLC vs. Jupiter Fund Management | Carnival PLC vs. Associated British Foods |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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