Correlation Between Carlyle and Robinhood Markets

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

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

Diversification Opportunities for Carlyle and Robinhood Markets

0.48

Correlation Coefficient

Carlyle  Robinhood Markets

Very weak diversification

The 3 months correlation between Carlyle and Robinhood is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Robinhood Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robinhood Markets 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 Robinhood Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robinhood Markets has no effect on the direction of Carlyle i.e., Carlyle and Robinhood Markets go up and down completely randomly.

Pair Corralation between Carlyle and Robinhood Markets

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Robinhood Markets. But the stock apears to be less risky and, when comparing its historical volatility, Carlyle Group is 2.1 times less risky than Robinhood Markets. The stock trades about -0.08 of its potential returns per unit of risk. The Robinhood Markets is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,828  in Robinhood Markets on December 29, 2024 and sell it today you would earn a total of  364.00  from holding Robinhood Markets or generate 9.51% return on investment over 90 days.

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

Carlyle Group  vs.  Robinhood Markets

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.

Robinhood Markets

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Robinhood Markets are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Robinhood Markets exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carlyle and Robinhood Markets

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

The idea behind Carlyle Group and Robinhood Markets 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.