Correlation Between Carlyle Secured and Elysee Development

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

By analyzing existing cross correlation between Carlyle Secured Lending and Elysee Development Corp, you can compare the effects of market volatilities on Carlyle Secured and Elysee Development 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 Secured with a short position of Elysee Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and Elysee Development.

Diversification Opportunities for Carlyle Secured and Elysee Development

0.02

Correlation Coefficient

Carlyle Secured  Elysee Development

Significant diversification

The 3 months correlation between Carlyle and Elysee is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending and Elysee Development Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elysee Development Corp and Carlyle Secured 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 Secured Lending are associated (or correlated) with Elysee Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elysee Development Corp has no effect on the direction of Carlyle Secured i.e., Carlyle Secured and Elysee Development go up and down completely randomly.

Pair Corralation between Carlyle Secured and Elysee Development

Given the investment horizon of 90 days Carlyle Secured is expected to generate 5.39 times less return on investment than Elysee Development. But when comparing it to its historical volatility, Carlyle Secured Lending is 5.94 times less risky than Elysee Development. It trades about 0.04 of its potential returns per unit of risk. Elysee Development Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Elysee Development Corp on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Elysee Development Corp or generate 0.0% return on investment over 90 days.

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

Carlyle Secured Lending  vs.  Elysee Development Corp

Carlyle Secured Lending

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Carlyle Secured may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Elysee Development Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elysee Development Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Elysee Development is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carlyle Secured and Elysee Development

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

The idea behind Carlyle Secured Lending and Elysee Development Corp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.