Correlation Between ClimateRock and Carlyle

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

By analyzing existing cross correlation between ClimateRock Class A and Carlyle Group, you can compare the effects of market volatilities on ClimateRock and Carlyle 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 ClimateRock with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of ClimateRock and Carlyle.

Diversification Opportunities for ClimateRock and Carlyle

-0.35

Correlation Coefficient

ClimateRock  Carlyle

Very good diversification

The 3 months correlation between ClimateRock and Carlyle is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ClimateRock Class A and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and ClimateRock 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 ClimateRock Class A are associated (or correlated) with Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of ClimateRock i.e., ClimateRock and Carlyle go up and down completely randomly.

Pair Corralation between ClimateRock and Carlyle

Given the investment horizon of 90 days ClimateRock Class A is expected to generate 0.22 times more return on investment than Carlyle. However, ClimateRock Class A is 4.48 times less risky than Carlyle. It trades about 0.05 of its potential returns per unit of risk. Carlyle Group is currently generating about -0.08 per unit of risk. If you would invest  1,179  in ClimateRock Class A on December 30, 2024 and sell it today you would earn a total of  22.00  from holding ClimateRock Class A or generate 1.87% return on investment over 90 days.

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

ClimateRock Class A  vs.  Carlyle Group

ClimateRock Class

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ClimateRock Class A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, ClimateRock is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ClimateRock and Carlyle

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

The idea behind ClimateRock Class A and Carlyle Group 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.