Correlation Between Carlyle and Bynordic Acquisition

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

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

Diversification Opportunities for Carlyle and Bynordic Acquisition

0.08

Correlation Coefficient

Carlyle  Bynordic Acquisition

Significant diversification

The 3 months correlation between Carlyle and Bynordic is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Bynordic Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bynordic Acquisition Corp 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 Bynordic Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bynordic Acquisition Corp has no effect on the direction of Carlyle i.e., Carlyle and Bynordic Acquisition go up and down completely randomly.

Pair Corralation between Carlyle and Bynordic Acquisition

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 6.14 times more return on investment than Bynordic Acquisition. However, Carlyle is 6.14 times more volatile than Bynordic Acquisition Corp. It trades about 0.06 of its potential returns per unit of risk. Bynordic Acquisition Corp is currently generating about 0.05 per unit of risk. If you would invest  2,796  in Carlyle Group on December 2, 2024 and sell it today you would earn a total of  2,188  from holding Carlyle Group or generate 78.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.99%
Values	Daily Returns

Carlyle Group  vs.  Bynordic Acquisition Corp

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 nearly stable technical and fundamental indicators, Carlyle is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Bynordic Acquisition Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bynordic Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Bynordic Acquisition is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carlyle and Bynordic Acquisition

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

The idea behind Carlyle Group and Bynordic Acquisition Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.