Correlation Between Mattel and Carnival Plc
Can any of the company-specific risk be diversified away by investing in both Mattel 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 Mattel and Carnival Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Carnival Plc ADS, you can compare the effects of market volatilities on Mattel 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 Mattel with a short position of Carnival Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Carnival Plc.
Diversification Opportunities for Mattel and Carnival Plc
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mattel and Carnival is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc and Carnival Plc ADS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival Plc ADS and Mattel 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 Mattel Inc 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 ADS has no effect on the direction of Mattel i.e., Mattel and Carnival Plc go up and down completely randomly.
Pair Corralation between Mattel and Carnival Plc
Considering the 90-day investment horizon Mattel is expected to generate 24.7 times less return on investment than Carnival Plc. But when comparing it to its historical volatility, Mattel Inc is 1.49 times less risky than Carnival Plc. It trades about 0.01 of its potential returns per unit of risk. Carnival Plc ADS is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 843.00 in Carnival Plc ADS on August 31, 2024 and sell it today you would earn a total of 1,425 from holding Carnival Plc ADS or generate 169.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mattel Inc vs. Carnival Plc ADS
Performance |
| Timeline |
| Mattel Inc |
| Carnival Plc ADS |
Mattel and Carnival Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Carnival Plc
The main advantage of trading using opposite Mattel and Carnival Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel 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.| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
| Carnival Plc vs. Callaway Golf | Carnival Plc vs. Peloton Interactive | Carnival Plc vs. Vista Outdoor | Carnival Plc vs. Clarus Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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