Correlation Between Carlyle and Alpha Star
Can any of the company-specific risk be diversified away by investing in both Carlyle and Alpha Star 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 Alpha Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Alpha Star Acquisition, you can compare the effects of market volatilities on Carlyle and Alpha Star 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 Alpha Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Alpha Star.
Diversification Opportunities for Carlyle and Alpha Star
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlyle and Alpha is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Alpha Star Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Star Acquisition 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 Alpha Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Star Acquisition has no effect on the direction of Carlyle i.e., Carlyle and Alpha Star go up and down completely randomly.
Pair Corralation between Carlyle and Alpha Star
Allowing for the 90-day total investment horizon Carlyle is expected to generate 11.2 times less return on investment than Alpha Star. But when comparing it to its historical volatility, Carlyle Group is 3.15 times less risky than Alpha Star. It trades about 0.14 of its potential returns per unit of risk. Alpha Star Acquisition is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Alpha Star Acquisition on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Alpha Star Acquisition or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 19.05% |
| Values | Daily Returns |
Carlyle Group vs. Alpha Star Acquisition
Performance |
| Timeline |
| Carlyle Group |
| Alpha Star Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Carlyle and Alpha Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Alpha Star
The main advantage of trading using opposite Carlyle and Alpha Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Alpha Star 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 Alpha Star will offset losses from the drop in Alpha Star's long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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