Correlation Between Carlyle and DT Cloud

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

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

Diversification Opportunities for Carlyle and DT Cloud

-0.74

Correlation Coefficient

Carlyle  DT Cloud

Pay attention - limited upside

The 3 months correlation between Carlyle and DYCQ is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and DT Cloud Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DT Cloud Acquisition 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 DT Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DT Cloud Acquisition has no effect on the direction of Carlyle i.e., Carlyle and DT Cloud go up and down completely randomly.

Pair Corralation between Carlyle and DT Cloud

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the DT Cloud. In addition to that, Carlyle is 13.55 times more volatile than DT Cloud Acquisition. It trades about -0.04 of its total potential returns per unit of risk. DT Cloud Acquisition is currently generating about 0.24 per unit of volatility. If you would invest  1,044  in DT Cloud Acquisition on December 27, 2024 and sell it today you would earn a total of  29.00  from holding DT Cloud Acquisition or generate 2.78% return on investment over 90 days.

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

Carlyle Group  vs.  DT Cloud Acquisition

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.

DT Cloud Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DT Cloud Acquisition are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, DT Cloud is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Carlyle and DT Cloud

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

The idea behind Carlyle Group and DT Cloud Acquisition 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.