Correlation Between EQT AB and Carlyle
Can any of the company-specific risk be diversified away by investing in both EQT AB 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 EQT AB and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQT AB and Carlyle Group, you can compare the effects of market volatilities on EQT AB 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 EQT AB with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQT AB and Carlyle.
Diversification Opportunities for EQT AB and Carlyle
Excellent diversification
The 3 months correlation between EQT and Carlyle is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding EQT AB and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and EQT AB 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 EQT AB 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 EQT AB i.e., EQT AB and Carlyle go up and down completely randomly.
Pair Corralation between EQT AB and Carlyle
Assuming the 90 days horizon EQT AB is expected to under-perform the Carlyle. But the stock apears to be less risky and, when comparing its historical volatility, EQT AB is 1.31 times less risky than Carlyle. The stock trades about -0.06 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 3,540 in Carlyle Group on August 30, 2024 and sell it today you would earn a total of 1,511 from holding Carlyle Group or generate 42.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EQT AB vs. Carlyle Group
Performance |
| Timeline |
| EQT AB |
| Carlyle Group |
EQT AB and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQT AB and Carlyle
The main advantage of trading using opposite EQT AB and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQT AB 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.| EQT AB vs. LEGACY IRON ORE | EQT AB vs. BlueScope Steel Limited | EQT AB vs. Tianjin Capital Environmental | EQT AB vs. SERI INDUSTRIAL EO |
| Carlyle vs. The Boston Beer | Carlyle vs. Uber Technologies | Carlyle vs. GLG LIFE TECH | Carlyle vs. THORNEY TECHS LTD |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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