Correlation Between Carlyle and Finnovate Acquisition

Can any of the company-specific risk be diversified away by investing in both Carlyle and Finnovate 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 Finnovate 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 Finnovate Acquisition Corp, you can compare the effects of market volatilities on Carlyle and Finnovate 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 Finnovate Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Finnovate Acquisition.

Diversification Opportunities for Carlyle and Finnovate Acquisition

-0.29

Correlation Coefficient

Carlyle  Finnovate Acquisition

Very good diversification

The 3 months correlation between Carlyle and Finnovate is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Finnovate Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finnovate 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 Finnovate Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finnovate Acquisition has no effect on the direction of Carlyle i.e., Carlyle and Finnovate Acquisition go up and down completely randomly.

Pair Corralation between Carlyle and Finnovate Acquisition

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Finnovate Acquisition. In addition to that, Carlyle is 17.66 times more volatile than Finnovate Acquisition Corp. It trades about -0.03 of its total potential returns per unit of risk. Finnovate Acquisition Corp is currently generating about 0.0 per unit of volatility. If you would invest  1,162  in Finnovate Acquisition Corp on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Finnovate Acquisition Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.82%
Values	Daily Returns

Carlyle Group  vs.  Finnovate 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.

Finnovate Acquisition

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Carlyle and Finnovate Acquisition

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

The idea behind Carlyle Group and Finnovate 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.