Correlation Between Carnival and DraftKings

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

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

Diversification Opportunities for Carnival and DraftKings

0.9

Correlation Coefficient

Carnival  DraftKings

Almost no diversification

The 3 months correlation between Carnival and DraftKings is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Carnival and DraftKings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DraftKings 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 DraftKings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DraftKings has no effect on the direction of Carnival i.e., Carnival and DraftKings go up and down completely randomly.

Pair Corralation between Carnival and DraftKings

Considering the 90-day investment horizon Carnival is expected to generate 1.03 times more return on investment than DraftKings. However, Carnival is 1.03 times more volatile than DraftKings. It trades about 0.27 of its potential returns per unit of risk. DraftKings is currently generating about 0.19 per unit of risk. If you would invest  1,953  in Carnival on May 6, 2025 and sell it today you would earn a total of  993.00  from holding Carnival or generate 50.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Carnival  vs.  DraftKings

Carnival

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carnival are ranked lower than 21 (%) 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.

DraftKings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DraftKings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, DraftKings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carnival and DraftKings

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

The idea behind Carnival and DraftKings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.