Correlation Between Carlyle and Associated Capital
Can any of the company-specific risk be diversified away by investing in both Carlyle and Associated Capital 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 Carlyle and Associated Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Associated Capital Group, you can compare the effects of market volatilities on Carlyle and Associated Capital 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 Carlyle with a short position of Associated Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Associated Capital.
Diversification Opportunities for Carlyle and Associated Capital
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Carlyle and Associated is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Associated Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated Capital and Carlyle 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 Carlyle Group are associated (or correlated) with Associated Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated Capital has no effect on the direction of Carlyle i.e., Carlyle and Associated Capital go up and down completely randomly.
Pair Corralation between Carlyle and Associated Capital
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 3.12 times more return on investment than Associated Capital. However, Carlyle is 3.12 times more volatile than Associated Capital Group. It trades about 0.14 of its potential returns per unit of risk. Associated Capital Group is currently generating about 0.07 per unit of risk. If you would invest 4,987 in Carlyle Group on August 26, 2024 and sell it today you would earn a total of 378.00 from holding Carlyle Group or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Associated Capital Group
Performance |
| Timeline |
| Carlyle Group |
| Associated Capital |
Carlyle and Associated Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Associated Capital
The main advantage of trading using opposite Carlyle and Associated Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Associated Capital 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 Associated Capital will offset losses from the drop in Associated Capital's long position.| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International |
| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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