Correlation Between Carlyle and Center Coast

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

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

Diversification Opportunities for Carlyle and Center Coast

0.73

Correlation Coefficient

Carlyle  Center Coast

Poor diversification

The 3 months correlation between Carlyle and Center is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Center Coast Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Center Coast Mlp 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 Center Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Center Coast Mlp has no effect on the direction of Carlyle i.e., Carlyle and Center Coast go up and down completely randomly.

Pair Corralation between Carlyle and Center Coast

If you would invest  3,781  in Carlyle Group on September 5, 2024 and sell it today you would earn a total of  1,467  from holding Carlyle Group or generate 38.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Carlyle Group  vs.  Center Coast Mlp

Carlyle Group

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Center Coast Mlp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Center Coast Mlp has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy technical and fundamental indicators, Center Coast is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carlyle and Center Coast

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

The idea behind Carlyle Group and Center Coast Mlp 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.