Correlation Between Carlyle and Cornerstone Strategic

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

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

Diversification Opportunities for Carlyle and Cornerstone Strategic

0.82

Correlation Coefficient

Carlyle  Cornerstone Strategic

Very poor diversification

The 3 months correlation between Carlyle and Cornerstone is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Carlyle i.e., Carlyle and Cornerstone Strategic go up and down completely randomly.

Pair Corralation between Carlyle and Cornerstone Strategic

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 1.42 times more return on investment than Cornerstone Strategic. However, Carlyle is 1.42 times more volatile than Cornerstone Strategic Return. It trades about -0.05 of its potential returns per unit of risk. Cornerstone Strategic Return is currently generating about -0.11 per unit of risk. If you would invest  5,018  in Carlyle Group on December 29, 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

Carlyle Group  vs.  Cornerstone Strategic Return

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.

Cornerstone Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornerstone Strategic Return has generated negative risk-adjusted returns adding no value to fund investors. Despite unfluctuating performance in the last few months, the Fund's basic 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 mutual fund stockholders.

Pair Trading with Carlyle and Cornerstone Strategic

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

The idea behind Carlyle Group and Cornerstone Strategic Return 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.