Correlation Between Carlyle and Focus Financial

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

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

Diversification Opportunities for Carlyle and Focus Financial

0.0

Correlation Coefficient

Carlyle  Focus Financial

Pay attention - limited upside

The 3 months correlation between Carlyle and Focus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Focus Financial Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Financial Partners 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 Focus Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Financial Partners has no effect on the direction of Carlyle i.e., Carlyle and Focus Financial go up and down completely randomly.

Pair Corralation between Carlyle and Focus Financial

If you would invest (100.00) in Focus Financial Partners on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Focus Financial Partners or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Carlyle Group  vs.  Focus Financial Partners

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.

Focus Financial Partners

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Carlyle and Focus Financial

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

The idea behind Carlyle Group and Focus Financial Partners 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.