Correlation Between Carlyle and Mill City

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

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

Diversification Opportunities for Carlyle and Mill City

0.69

Correlation Coefficient

Carlyle  Mill City

Poor diversification

The 3 months correlation between Carlyle and Mill is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of Carlyle i.e., Carlyle and Mill City go up and down completely randomly.

Pair Corralation between Carlyle and Mill City

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Mill City. But the stock apears to be less risky and, when comparing its historical volatility, Carlyle Group is 3.04 times less risky than Mill City. The stock trades about -0.05 of its potential returns per unit of risk. The Mill City Ventures is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  195.00  in Mill City Ventures on December 28, 2024 and sell it today you would lose (17.00) from holding Mill City Ventures or give up 8.72% of portfolio value over 90 days.

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

Carlyle Group  vs.  Mill City Ventures

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.

Mill City Ventures

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mill City Ventures are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mill City may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Carlyle and Mill City

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

The idea behind Carlyle Group and Mill City Ventures 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.