Correlation Between Federated Investors and Carlyle Secured

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

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

Diversification Opportunities for Federated Investors and Carlyle Secured

-0.01

Correlation Coefficient

Federated Investors  Carlyle Secured

Good diversification

The 3 months correlation between Federated and Carlyle is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Federated Investors B and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending and Federated Investors 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 Federated Investors B are associated (or correlated) with Carlyle Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of Federated Investors i.e., Federated Investors and Carlyle Secured go up and down completely randomly.

Pair Corralation between Federated Investors and Carlyle Secured

Considering the 90-day investment horizon Federated Investors B is expected to generate 1.07 times more return on investment than Carlyle Secured. However, Federated Investors is 1.07 times more volatile than Carlyle Secured Lending. It trades about 0.01 of its potential returns per unit of risk. Carlyle Secured Lending is currently generating about -0.07 per unit of risk. If you would invest  4,061  in Federated Investors B on December 29, 2024 and sell it today you would earn a total of  8.00  from holding Federated Investors B or generate 0.2% return on investment over 90 days.

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

Federated Investors B  vs.  Carlyle Secured Lending

Federated Investors

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federated Investors B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Federated Investors is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Carlyle Secured Lending

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carlyle Secured Lending has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with Federated Investors and Carlyle Secured

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

The idea behind Federated Investors B and Carlyle Secured Lending 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.