Correlation Between Vinci Partners and Carlyle

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

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

Diversification Opportunities for Vinci Partners and Carlyle

0.18

Correlation Coefficient

Vinci Partners  Carlyle

Average diversification

The 3 months correlation between Vinci and Carlyle is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vinci Partners Investments and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Vinci Partners 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 Vinci Partners Investments 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 Vinci Partners i.e., Vinci Partners and Carlyle go up and down completely randomly.

Pair Corralation between Vinci Partners and Carlyle

Given the investment horizon of 90 days Vinci Partners Investments is expected to under-perform the Carlyle. But the stock apears to be less risky and, when comparing its historical volatility, Vinci Partners Investments is 1.44 times less risky than Carlyle. The stock trades about -0.02 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4,891  in Carlyle Group on October 23, 2024 and sell it today you would earn a total of  633.00  from holding Carlyle Group or generate 12.94% return on investment over 90 days.

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

Vinci Partners Investments  vs.  Carlyle Group

Vinci Partners Inves

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vinci Partners Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Vinci Partners is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Carlyle Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vinci Partners and Carlyle

The main advantage of trading using opposite Vinci Partners and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinci Partners 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 Vinci Partners Investments 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.