Correlation Between NYSE Composite and Carnival
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Carnival 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 NYSE Composite and Carnival into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Carnival, you can compare the effects of market volatilities on NYSE Composite and Carnival 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 NYSE Composite with a short position of Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Carnival.
Diversification Opportunities for NYSE Composite and Carnival
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Carnival is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival and NYSE Composite 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 NYSE Composite are associated (or correlated) with Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival has no effect on the direction of NYSE Composite i.e., NYSE Composite and Carnival go up and down completely randomly.
Pair Corralation between NYSE Composite and Carnival
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.95 times less return on investment than Carnival. But when comparing it to its historical volatility, NYSE Composite is 3.96 times less risky than Carnival. It trades about 0.12 of its potential returns per unit of risk. Carnival is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,565 in Carnival on August 24, 2024 and sell it today you would earn a total of 970.00 from holding Carnival or generate 61.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
NYSE Composite vs. Carnival
Performance |
| Timeline |
NYSE Composite and Carnival Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Carnival
Pair trading matchups for Carnival
Pair Trading with NYSE Composite and Carnival
The main advantage of trading using opposite NYSE Composite and Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Carnival 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 will offset losses from the drop in Carnival's long position.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| Carnival vs. Royal Caribbean Cruises | Carnival vs. Airbnb Inc | Carnival vs. Expedia Group | Carnival vs. Booking Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |