Correlation Between Carlyle and 02005NBN9

Can any of the company-specific risk be diversified away by investing in both Carlyle and 02005NBN9 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 02005NBN9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlyle Group and ALLY 47, you can compare the effects of market volatilities on Carlyle and 02005NBN9 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 02005NBN9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and 02005NBN9.

Diversification Opportunities for Carlyle and 02005NBN9

0.54

Correlation Coefficient

Carlyle  02005NBN9

Very weak diversification

The 3 months correlation between Carlyle and 02005NBN9 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and ALLY 47 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 02005NBN9 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 02005NBN9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 02005NBN9 has no effect on the direction of Carlyle i.e., Carlyle and 02005NBN9 go up and down completely randomly.

Pair Corralation between Carlyle and 02005NBN9

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.8 times more return on investment than 02005NBN9. However, Carlyle Group is 1.26 times less risky than 02005NBN9. It trades about -0.06 of its potential returns per unit of risk. ALLY 47 is currently generating about -0.11 per unit of risk. If you would invest  5,163  in Carlyle Group on December 25, 2024 and sell it today you would lose (539.00) from holding Carlyle Group or give up 10.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Carlyle Group  vs.  ALLY 47

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 unfluctuating 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.

02005NBN9

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALLY 47 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for ALLY 47 investors.

Pair Trading with Carlyle and 02005NBN9

The main advantage of trading using opposite Carlyle and 02005NBN9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, 02005NBN9 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 02005NBN9 will offset losses from the drop in 02005NBN9's long position.

The idea behind Carlyle Group and ALLY 47 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.