Correlation Between Oak Woods and Carlyle

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

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

Diversification Opportunities for Oak Woods and Carlyle

0.08

Correlation Coefficient

Oak Woods  Carlyle

Significant diversification

The 3 months correlation between Oak and Carlyle is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oak Woods Acquisition and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Oak Woods 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 Oak Woods 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 Oak Woods i.e., Oak Woods and Carlyle go up and down completely randomly.

Pair Corralation between Oak Woods and Carlyle

Assuming the 90 days horizon Oak Woods Acquisition is expected to generate 0.17 times more return on investment than Carlyle. However, Oak Woods Acquisition is 5.76 times less risky than Carlyle. It trades about 0.02 of its potential returns per unit of risk. Carlyle Group is currently generating about -0.05 per unit of risk. If you would invest  1,144  in Oak Woods Acquisition on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Oak Woods Acquisition or generate 0.61% return on investment over 90 days.

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

Oak Woods Acquisition  vs.  Carlyle Group

Oak Woods Acquisition

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oak Woods Acquisition are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Oak Woods 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

Very Weak

Over the last 90 days Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Oak Woods and Carlyle

The main advantage of trading using opposite Oak Woods and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oak Woods 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 Oak Woods Acquisition 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 CEOs Directory module to screen CEOs from public companies around the world.