Correlation Between Carlyle and Vinci Partners

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

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

Diversification Opportunities for Carlyle and Vinci Partners

0.42

Correlation Coefficient

Carlyle  Vinci Partners

Very weak diversification

The 3 months correlation between Carlyle and Vinci is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Vinci Partners Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci Partners Inves 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 Vinci Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci Partners Inves has no effect on the direction of Carlyle i.e., Carlyle and Vinci Partners go up and down completely randomly.

Pair Corralation between Carlyle and Vinci Partners

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Vinci Partners. In addition to that, Carlyle is 1.54 times more volatile than Vinci Partners Investments. It trades about -0.08 of its total potential returns per unit of risk. Vinci Partners Investments is currently generating about 0.05 per unit of volatility. If you would invest  992.00  in Vinci Partners Investments on December 20, 2024 and sell it today you would earn a total of  43.00  from holding Vinci Partners Investments or generate 4.33% return on investment over 90 days.

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

Carlyle Group  vs.  Vinci Partners Investments

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.

Vinci Partners Inves

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vinci Partners Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Vinci Partners is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Carlyle and Vinci Partners

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

The idea behind Carlyle Group and Vinci Partners Investments 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.