Correlation Between Carlyle and Nuveen Multi

Can any of the company-specific risk be diversified away by investing in both Carlyle and Nuveen Multi 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 Multi 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 Multi Asset Income, you can compare the effects of market volatilities on Carlyle and Nuveen Multi 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 Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Nuveen Multi.

Diversification Opportunities for Carlyle and Nuveen Multi

-0.67

Correlation Coefficient

Carlyle  Nuveen Multi

Excellent diversification

The 3 months correlation between Carlyle and Nuveen is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Nuveen Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Multi Asset 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 Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Multi Asset has no effect on the direction of Carlyle i.e., Carlyle and Nuveen Multi go up and down completely randomly.

Pair Corralation between Carlyle and Nuveen Multi

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 4.62 times more return on investment than Nuveen Multi. However, Carlyle is 4.62 times more volatile than Nuveen Multi Asset Income. It trades about 0.14 of its potential returns per unit of risk. Nuveen Multi Asset Income is currently generating about 0.24 per unit of risk. If you would invest  4,872  in Carlyle Group on September 5, 2024 and sell it today you would earn a total of  376.00  from holding Carlyle Group or generate 7.72% 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.  Nuveen Multi Asset Income

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 abnormal technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Multi Asset Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Nuveen Multi is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Carlyle and Nuveen Multi

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

The idea behind Carlyle Group and Nuveen Multi Asset Income 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.