Correlation Between Atlanticus Holdings and Carlyle

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

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

Diversification Opportunities for Atlanticus Holdings and Carlyle

0.0

Correlation Coefficient

Atlanticus Holdings  Carlyle

Pay attention - limited upside

The 3 months correlation between Atlanticus and Carlyle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atlanticus Holdings and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Atlanticus Holdings 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 Atlanticus Holdings 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 Atlanticus Holdings i.e., Atlanticus Holdings and Carlyle go up and down completely randomly.

Pair Corralation between Atlanticus Holdings and Carlyle

Assuming the 90 days horizon Atlanticus Holdings is expected to generate 0.69 times more return on investment than Carlyle. However, Atlanticus Holdings is 1.45 times less risky than Carlyle. It trades about 0.09 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.03 per unit of risk. If you would invest  2,203  in Atlanticus Holdings on October 13, 2024 and sell it today you would earn a total of  197.00  from holding Atlanticus Holdings or generate 8.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Atlanticus Holdings  vs.  The Carlyle Group

Atlanticus Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atlanticus Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Atlanticus Holdings and Carlyle

The main advantage of trading using opposite Atlanticus Holdings and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlanticus Holdings 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 Atlanticus Holdings and The 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.