Correlation Between Carlyle Secured and Golub Capital

Can any of the company-specific risk be diversified away by investing in both Carlyle Secured and Golub Capital 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 Golub Capital 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 Golub Capital BDC, you can compare the effects of market volatilities on Carlyle Secured and Golub Capital 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 Golub Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and Golub Capital.

Diversification Opportunities for Carlyle Secured and Golub Capital

0.44

Correlation Coefficient

Carlyle Secured  Golub Capital

Very weak diversification

The 3 months correlation between Carlyle and Golub is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending and Golub Capital BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golub Capital BDC 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 Golub Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golub Capital BDC has no effect on the direction of Carlyle Secured i.e., Carlyle Secured and Golub Capital go up and down completely randomly.

Pair Corralation between Carlyle Secured and Golub Capital

Given the investment horizon of 90 days Carlyle Secured is expected to generate 1.22 times less return on investment than Golub Capital. In addition to that, Carlyle Secured is 1.24 times more volatile than Golub Capital BDC. It trades about 0.07 of its total potential returns per unit of risk. Golub Capital BDC is currently generating about 0.11 per unit of volatility. If you would invest  1,485  in Golub Capital BDC on September 2, 2024 and sell it today you would earn a total of  82.00  from holding Golub Capital BDC or generate 5.52% return on investment over 90 days.

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

Carlyle Secured Lending  vs.  Golub Capital BDC

Carlyle Secured Lending

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Carlyle Secured is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Golub Capital BDC

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golub Capital BDC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Golub Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Carlyle Secured and Golub Capital

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

The idea behind Carlyle Secured Lending and Golub Capital BDC 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.