Correlation Between Direct Selling and Carlyle

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

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

Diversification Opportunities for Direct Selling and Carlyle

-0.74

Correlation Coefficient

Direct Selling  Carlyle

Pay attention - limited upside

The 3 months correlation between Direct and Carlyle is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Direct Selling Acquisition and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Direct Selling 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 Direct Selling Acquisition 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 Direct Selling i.e., Direct Selling and Carlyle go up and down completely randomly.

Pair Corralation between Direct Selling and Carlyle

Given the investment horizon of 90 days Direct Selling Acquisition is expected to generate 0.11 times more return on investment than Carlyle. However, Direct Selling Acquisition is 8.8 times less risky than Carlyle. It trades about 0.19 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.02 per unit of risk. If you would invest  1,037  in Direct Selling Acquisition on October 12, 2024 and sell it today you would earn a total of  40.00  from holding Direct Selling Acquisition or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	25.66%
Values	Daily Returns

Direct Selling Acquisition  vs.  The Carlyle Group

Direct Selling Acqui

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Direct Selling Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Direct Selling is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Direct Selling and Carlyle

The main advantage of trading using opposite Direct Selling and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Direct Selling 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 Direct Selling Acquisition and The 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.