Correlation Between Carlyle and Firsthand Technology

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

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

Diversification Opportunities for Carlyle and Firsthand Technology

0.0

Correlation Coefficient

Carlyle  Firsthand Technology

Pay attention - limited upside

The 3 months correlation between Carlyle and Firsthand is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Firsthand Technology Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Technology 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 Firsthand Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Technology has no effect on the direction of Carlyle i.e., Carlyle and Firsthand Technology go up and down completely randomly.

Pair Corralation between Carlyle and Firsthand Technology

If you would invest (100.00) in Firsthand Technology Value on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Firsthand Technology Value or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Carlyle Group  vs.  Firsthand Technology Value

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.

Firsthand Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Firsthand Technology Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Firsthand Technology 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 Firsthand Technology

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

The idea behind Carlyle Group and Firsthand Technology Value 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.