Correlation Between Carlyle and Chicago Atlantic

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

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

Diversification Opportunities for Carlyle and Chicago Atlantic

0.83

Correlation Coefficient

Carlyle  Chicago Atlantic

Very poor diversification

The 3 months correlation between Carlyle and Chicago is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Chicago Atlantic BDC, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Atlantic BDC, 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 Chicago Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Atlantic BDC, has no effect on the direction of Carlyle i.e., Carlyle and Chicago Atlantic go up and down completely randomly.

Pair Corralation between Carlyle and Chicago Atlantic

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Chicago Atlantic. In addition to that, Carlyle is 1.92 times more volatile than Chicago Atlantic BDC,. It trades about -0.11 of its total potential returns per unit of risk. Chicago Atlantic BDC, is currently generating about -0.12 per unit of volatility. If you would invest  1,257  in Chicago Atlantic BDC, on September 22, 2024 and sell it today you would lose (34.00) from holding Chicago Atlantic BDC, or give up 2.7% of portfolio value over 90 days.

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

Carlyle Group  vs.  Chicago Atlantic BDC,

Carlyle Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 9 (%) 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.

Chicago Atlantic BDC,

Risk-Adjusted Performance

9 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Chicago Atlantic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Carlyle and Chicago Atlantic

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

The idea behind Carlyle Group and Chicago Atlantic BDC, 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.