Correlation Between Carlyle and Atlanticus Holdings

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

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

Diversification Opportunities for Carlyle and Atlanticus Holdings

0.88

Correlation Coefficient

Carlyle  Atlanticus Holdings

Very poor diversification

The 3 months correlation between Carlyle and Atlanticus is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Atlanticus Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanticus Holdings and Carlyle 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 Carlyle Group are associated (or correlated) with Atlanticus Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanticus Holdings has no effect on the direction of Carlyle i.e., Carlyle and Atlanticus Holdings go up and down completely randomly.

Pair Corralation between Carlyle and Atlanticus Holdings

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Atlanticus Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Carlyle Group is 1.3 times less risky than Atlanticus Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The Atlanticus Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  5,662  in Atlanticus Holdings on December 30, 2024 and sell it today you would lose (484.00) from holding Atlanticus Holdings or give up 8.55% of portfolio value over 90 days.

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

Carlyle Group  vs.  Atlanticus Holdings

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Atlanticus Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlanticus Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Atlanticus Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Carlyle and Atlanticus Holdings

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

The idea behind Carlyle Group and Atlanticus 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.