Correlation Between Nova Vision and Carlyle

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

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

Diversification Opportunities for Nova Vision and Carlyle

-0.36

Correlation Coefficient

Nova Vision  Carlyle

Very good diversification

The 3 months correlation between Nova and Carlyle is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nova Vision 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 Nova Vision 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 Nova Vision 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 Nova Vision i.e., Nova Vision and Carlyle go up and down completely randomly.

Pair Corralation between Nova Vision and Carlyle

If you would invest  4,100  in Nova Vision Acquisition on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Nova Vision Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Nova Vision Acquisition  vs.  The Carlyle Group

Nova Vision Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nova Vision Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nova Vision is not utilizing all of its potentials. The recent 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 weak 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 Nova Vision and Carlyle

The main advantage of trading using opposite Nova Vision and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nova Vision 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 Nova Vision 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.