Correlation Between Carlyle and Swiftmerge Acquisition

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

Diversification Opportunities for Carlyle and Swiftmerge Acquisition

0.01

Correlation Coefficient

Carlyle  Swiftmerge Acquisition

Significant diversification

The 3 months correlation between Carlyle and Swiftmerge is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Swiftmerge Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiftmerge 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 Swiftmerge Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiftmerge Acquisition has no effect on the direction of Carlyle i.e., Carlyle and Swiftmerge Acquisition go up and down completely randomly.

Pair Corralation between Carlyle and Swiftmerge Acquisition

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.31 times more return on investment than Swiftmerge Acquisition. However, Carlyle Group is 3.21 times less risky than Swiftmerge Acquisition. It trades about -0.03 of its potential returns per unit of risk. Swiftmerge Acquisition Corp is currently generating about -0.26 per unit of risk. If you would invest  5,274  in Carlyle Group on October 8, 2024 and sell it today you would lose (91.00) from holding Carlyle Group or give up 1.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	31.58%
Values	Daily Returns

Carlyle Group  vs.  Swiftmerge Acquisition Corp

Carlyle Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Swiftmerge Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swiftmerge Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Swiftmerge Acquisition is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Carlyle and Swiftmerge Acquisition

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

The idea behind Carlyle Group and Swiftmerge 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.