Correlation Between Carlyle and Bny Mellon

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

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

Diversification Opportunities for Carlyle and Bny Mellon

-0.19

Correlation Coefficient

Carlyle  Bny Mellon

Good diversification

The 3 months correlation between Carlyle and Bny is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Bny Mellon Municipalome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon Municipalome 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 Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon Municipalome has no effect on the direction of Carlyle i.e., Carlyle and Bny Mellon go up and down completely randomly.

Pair Corralation between Carlyle and Bny Mellon

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 3.49 times more return on investment than Bny Mellon. However, Carlyle is 3.49 times more volatile than Bny Mellon Municipalome. It trades about 0.07 of its potential returns per unit of risk. Bny Mellon Municipalome is currently generating about 0.09 per unit of risk. If you would invest  3,337  in Carlyle Group on September 12, 2024 and sell it today you would earn a total of  1,902  from holding Carlyle Group or generate 57.0% return on investment over 90 days.

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

Carlyle Group  vs.  Bny Mellon Municipalome

Carlyle Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Bny Mellon Municipalome

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bny Mellon Municipalome are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, Bny Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carlyle and Bny Mellon

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

The idea behind Carlyle Group and Bny Mellon Municipalome 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.