Correlation Between Carlyle and Perceptive Capital

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

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

Diversification Opportunities for Carlyle and Perceptive Capital

-0.67

Correlation Coefficient

Carlyle  Perceptive Capital

Excellent diversification

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

Pair Corralation between Carlyle and Perceptive Capital

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Perceptive Capital. In addition to that, Carlyle is 13.97 times more volatile than Perceptive Capital Solutions. It trades about -0.08 of its total potential returns per unit of risk. Perceptive Capital Solutions is currently generating about 0.14 per unit of volatility. If you would invest  1,013  in Perceptive Capital Solutions on December 30, 2024 and sell it today you would earn a total of  17.00  from holding Perceptive Capital Solutions or generate 1.68% 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.  Perceptive Capital Solutions

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Perceptive Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perceptive Capital Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Perceptive Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Carlyle and Perceptive Capital

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

The idea behind Carlyle Group and Perceptive Capital Solutions 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.