Correlation Between Carlyle and Perella Weinberg

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

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

Diversification Opportunities for Carlyle and Perella Weinberg

0.79

Correlation Coefficient

Carlyle  Perella Weinberg

Poor diversification

The 3 months correlation between Carlyle and Perella is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Perella Weinberg Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perella Weinberg Partners 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 Perella Weinberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perella Weinberg Partners has no effect on the direction of Carlyle i.e., Carlyle and Perella Weinberg go up and down completely randomly.

Pair Corralation between Carlyle and Perella Weinberg

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.81 times more return on investment than Perella Weinberg. However, Carlyle Group is 1.23 times less risky than Perella Weinberg. It trades about -0.04 of its potential returns per unit of risk. Perella Weinberg Partners is currently generating about -0.06 per unit of risk. If you would invest  5,287  in Carlyle Group on November 28, 2024 and sell it today you would lose (326.00) from holding Carlyle Group or give up 6.17% of portfolio value over 90 days.

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

Carlyle Group  vs.  Perella Weinberg Partners

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 nearly stable technical and fundamental indicators, Carlyle is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Perella Weinberg Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perella Weinberg Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Carlyle and Perella Weinberg

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

The idea behind Carlyle Group and Perella Weinberg Partners 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.