Correlation Between Carbon Streaming and Carlyle Secured

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

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

Diversification Opportunities for Carbon Streaming and Carlyle Secured

0.21

Correlation Coefficient

Carbon Streaming  Carlyle Secured

Modest diversification

The 3 months correlation between Carbon and Carlyle is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Carbon Streaming Corp 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 Carbon Streaming 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 Carbon Streaming Corp 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 Carbon Streaming i.e., Carbon Streaming and Carlyle Secured go up and down completely randomly.

Pair Corralation between Carbon Streaming and Carlyle Secured

Assuming the 90 days horizon Carbon Streaming is expected to generate 1.13 times less return on investment than Carlyle Secured. In addition to that, Carbon Streaming is 4.84 times more volatile than Carlyle Secured Lending. It trades about 0.06 of its total potential returns per unit of risk. Carlyle Secured Lending is currently generating about 0.3 per unit of volatility. If you would invest  1,741  in Carlyle Secured Lending on October 1, 2024 and sell it today you would earn a total of  87.00  from holding Carlyle Secured Lending or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Carbon Streaming Corp  vs.  Carlyle Secured Lending

Carbon Streaming Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Carlyle Secured Lending

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Carlyle Secured may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Carbon Streaming and Carlyle Secured

The main advantage of trading using opposite Carbon Streaming and Carlyle Secured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carbon Streaming 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 Carbon Streaming Corp 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.

Check out your portfolio center.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.