Correlation Between Carlyle and Franklin Universal

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

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

Diversification Opportunities for Carlyle and Franklin Universal

-0.24

Correlation Coefficient

Carlyle  Franklin Universal

Very good diversification

The 3 months correlation between Carlyle and Franklin is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Franklin Universal Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Universal Closed 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 Franklin Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Universal Closed has no effect on the direction of Carlyle i.e., Carlyle and Franklin Universal go up and down completely randomly.

Pair Corralation between Carlyle and Franklin Universal

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Franklin Universal. In addition to that, Carlyle is 4.23 times more volatile than Franklin Universal Closed. It trades about -0.07 of its total potential returns per unit of risk. Franklin Universal Closed is currently generating about 0.14 per unit of volatility. If you would invest  714.00  in Franklin Universal Closed on December 20, 2024 and sell it today you would earn a total of  37.00  from holding Franklin Universal Closed or generate 5.18% 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.  Franklin Universal Closed

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 unfluctuating 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.

Franklin Universal Closed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Universal Closed are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Franklin Universal 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 Franklin Universal

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

The idea behind Carlyle Group and Franklin Universal Closed 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.