Correlation Between Carlyle and Alta Global

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

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

Diversification Opportunities for Carlyle and Alta Global

-0.75

Correlation Coefficient

Carlyle  Alta Global

Pay attention - limited upside

The 3 months correlation between Carlyle and Alta is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Alta Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Global Group 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 Alta Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Global Group has no effect on the direction of Carlyle i.e., Carlyle and Alta Global go up and down completely randomly.

Pair Corralation between Carlyle and Alta Global

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.28 times more return on investment than Alta Global. However, Carlyle Group is 3.53 times less risky than Alta Global. It trades about 0.25 of its potential returns per unit of risk. Alta Global Group is currently generating about -0.11 per unit of risk. If you would invest  3,822  in Carlyle Group on August 31, 2024 and sell it today you would earn a total of  1,448  from holding Carlyle Group or generate 37.89% return on investment over 90 days.

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

Carlyle Group  vs.  Alta Global Group

Carlyle Group

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 19 (%) 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.

Alta Global Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alta Global Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Carlyle and Alta Global

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

The idea behind Carlyle Group and Alta Global Group 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.