Correlation Between Carnival and Mondee Holdings

Can any of the company-specific risk be diversified away by investing in both Carnival and Mondee Holdings 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 Carnival and Mondee Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carnival and Mondee Holdings, you can compare the effects of market volatilities on Carnival and Mondee Holdings 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 Carnival with a short position of Mondee Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carnival and Mondee Holdings.

Diversification Opportunities for Carnival and Mondee Holdings

-0.77

Correlation Coefficient

Carnival  Mondee Holdings

Pay attention - limited upside

The 3 months correlation between Carnival and Mondee is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Carnival and Mondee Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondee Holdings and Carnival 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 Carnival are associated (or correlated) with Mondee Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondee Holdings has no effect on the direction of Carnival i.e., Carnival and Mondee Holdings go up and down completely randomly.

Pair Corralation between Carnival and Mondee Holdings

Considering the 90-day investment horizon Carnival is expected to generate 0.37 times more return on investment than Mondee Holdings. However, Carnival is 2.71 times less risky than Mondee Holdings. It trades about 0.32 of its potential returns per unit of risk. Mondee Holdings is currently generating about -0.2 per unit of risk. If you would invest  1,634  in Carnival on September 2, 2024 and sell it today you would earn a total of  909.00  from holding Carnival or generate 55.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Carnival  vs.  Mondee Holdings

Carnival

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carnival are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Carnival disclosed solid returns over the last few months and may actually be approaching a breakup point.

Mondee Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondee Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Carnival and Mondee Holdings

The main advantage of trading using opposite Carnival and Mondee Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carnival position performs unexpectedly, Mondee Holdings 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 Mondee Holdings will offset losses from the drop in Mondee Holdings' long position.

The idea behind Carnival and Mondee Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.