Correlation Between Carlyle and Guggenheim Taxable

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

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

Diversification Opportunities for Carlyle and Guggenheim Taxable

-0.16

Correlation Coefficient

Carlyle  Guggenheim Taxable

Good diversification

The 3 months correlation between Carlyle and Guggenheim is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Guggenheim Taxable Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Taxable 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 Guggenheim Taxable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Taxable has no effect on the direction of Carlyle i.e., Carlyle and Guggenheim Taxable go up and down completely randomly.

Pair Corralation between Carlyle and Guggenheim Taxable

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Guggenheim Taxable. In addition to that, Carlyle is 4.18 times more volatile than Guggenheim Taxable Municipal. It trades about -0.08 of its total potential returns per unit of risk. Guggenheim Taxable Municipal is currently generating about 0.08 per unit of volatility. If you would invest  1,497  in Guggenheim Taxable Municipal on December 29, 2024 and sell it today you would earn a total of  46.00  from holding Guggenheim Taxable Municipal or generate 3.07% 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.  Guggenheim Taxable Municipal

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 abnormal performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Guggenheim Taxable

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Taxable Municipal are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guggenheim Taxable is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carlyle and Guggenheim Taxable

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

The idea behind Carlyle Group and Guggenheim Taxable Municipal 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.