Correlation Between Future Health and Carlyle

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

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

Diversification Opportunities for Future Health and Carlyle

-0.73

Correlation Coefficient

Future Health  Carlyle

Pay attention - limited upside

The 3 months correlation between Future and Carlyle is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Future Health Esg and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Future Health 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 Future Health Esg 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 Future Health i.e., Future Health and Carlyle go up and down completely randomly.

Pair Corralation between Future Health and Carlyle

If you would invest  1,726  in The Carlyle Group on October 13, 2024 and sell it today you would earn a total of  75.00  from holding The Carlyle Group or generate 4.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.7%
Values	Daily Returns

Future Health Esg  vs.  The Carlyle Group

Future Health Esg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Health Esg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Future Health is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private 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 Future Health and Carlyle

The main advantage of trading using opposite Future Health and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Health 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 Future Health Esg 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.