Correlation Between Carlyle and Loandepot

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

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

Diversification Opportunities for Carlyle and Loandepot

0.54

Correlation Coefficient

Carlyle  Loandepot

Very weak diversification

The 3 months correlation between Carlyle and Loandepot is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Loandepot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loandepot 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 Loandepot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loandepot has no effect on the direction of Carlyle i.e., Carlyle and Loandepot go up and down completely randomly.

Pair Corralation between Carlyle and Loandepot

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.76 times more return on investment than Loandepot. However, Carlyle Group is 1.32 times less risky than Loandepot. It trades about -0.05 of its potential returns per unit of risk. Loandepot is currently generating about -0.23 per unit of risk. If you would invest  5,018  in Carlyle Group on December 29, 2024 and sell it today you would lose (509.00) from holding Carlyle Group or give up 10.14% of portfolio value over 90 days.

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

Carlyle Group  vs.  Loandepot

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 abnormal 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.

Loandepot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Loandepot has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Carlyle and Loandepot

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

The idea behind Carlyle Group and Loandepot 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.