Correlation Between Carlyle and MSCI ACWI

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

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

Diversification Opportunities for Carlyle and MSCI ACWI

-0.61

Correlation Coefficient

Carlyle  MSCI ACWI

Excellent diversification

The 3 months correlation between Carlyle and MSCI is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and MSCI ACWI exAUCONSUMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI ACWI exAUCONSUMER 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 MSCI ACWI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI ACWI exAUCONSUMER has no effect on the direction of Carlyle i.e., Carlyle and MSCI ACWI go up and down completely randomly.

Pair Corralation between Carlyle and MSCI ACWI

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the MSCI ACWI. In addition to that, Carlyle is 12.47 times more volatile than MSCI ACWI exAUCONSUMER. It trades about -0.05 of its total potential returns per unit of risk. MSCI ACWI exAUCONSUMER is currently generating about 0.21 per unit of volatility. If you would invest  2,442  in MSCI ACWI exAUCONSUMER on December 28, 2024 and sell it today you would earn a total of  65.00  from holding MSCI ACWI exAUCONSUMER or generate 2.66% 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.  MSCI ACWI exAUCONSUMER

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.

MSCI ACWI exAUCONSUMER

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MSCI ACWI exAUCONSUMER are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, MSCI ACWI is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Carlyle and MSCI ACWI

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

The idea behind Carlyle Group and MSCI ACWI exAUCONSUMER 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.