Correlation Between Apollo Global and Carlyle

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

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

Diversification Opportunities for Apollo Global and Carlyle

0.89

Correlation Coefficient

Apollo Global  Carlyle

Very poor diversification

The 3 months correlation between Apollo and Carlyle is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Global Management and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Apollo Global 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 Apollo Global Management are associated (or correlated) with Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Apollo Global i.e., Apollo Global and Carlyle go up and down completely randomly.

Pair Corralation between Apollo Global and Carlyle

Considering the 90-day investment horizon Apollo Global Management is expected to under-perform the Carlyle. But the stock apears to be less risky and, when comparing its historical volatility, Apollo Global Management is 1.15 times less risky than Carlyle. The stock trades about -0.1 of its potential returns per unit of risk. The Carlyle Group is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  5,018  in Carlyle Group on December 28, 2024 and sell it today you would lose (509.00) from holding Carlyle Group or give up 10.14% of portfolio value over 90 days.

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

Apollo Global Management  vs.  Carlyle Group

Apollo Global Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apollo Global Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Carlyle Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Apollo Global and Carlyle

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

The idea behind Apollo Global Management and Carlyle Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.