Correlation Between Carlyle and Nuveen Dynamic

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

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

Diversification Opportunities for Carlyle and Nuveen Dynamic

-0.12

Correlation Coefficient

Carlyle  Nuveen Dynamic

Good diversification

The 3 months correlation between Carlyle and Nuveen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Nuveen Dynamic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dynamic Municipal 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 Nuveen Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dynamic Municipal has no effect on the direction of Carlyle i.e., Carlyle and Nuveen Dynamic go up and down completely randomly.

Pair Corralation between Carlyle and Nuveen Dynamic

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Nuveen Dynamic. In addition to that, Carlyle is 5.95 times more volatile than Nuveen Dynamic Municipal. It trades about -0.05 of its total potential returns per unit of risk. Nuveen Dynamic Municipal is currently generating about 0.16 per unit of volatility. If you would invest  976.00  in Nuveen Dynamic Municipal on December 28, 2024 and sell it today you would earn a total of  41.00  from holding Nuveen Dynamic Municipal or generate 4.2% return on investment over 90 days.

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

Carlyle Group  vs.  Nuveen Dynamic Municipal

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.

Nuveen Dynamic Municipal

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Dynamic Municipal are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Nuveen Dynamic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carlyle and Nuveen Dynamic

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

The idea behind Carlyle Group and Nuveen Dynamic Municipal 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..