Correlation Between Carlyle and Onity

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

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

Diversification Opportunities for Carlyle and Onity

0.51

Correlation Coefficient

Carlyle  Onity

Very weak diversification

The 3 months correlation between Carlyle and Onity is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Onity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onity 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 Onity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onity Group has no effect on the direction of Carlyle i.e., Carlyle and Onity go up and down completely randomly.

Pair Corralation between Carlyle and Onity

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Onity. But the stock apears to be less risky and, when comparing its historical volatility, Carlyle Group is 1.13 times less risky than Onity. The stock trades about -0.05 of its potential returns per unit of risk. The Onity Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,044  in Onity Group on December 28, 2024 and sell it today you would earn a total of  203.00  from holding Onity Group or generate 6.67% return on investment over 90 days.

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

Carlyle Group  vs.  Onity Group

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.

Onity Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Onity Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Onity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Carlyle and Onity

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

The idea behind Carlyle Group and Onity 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.