Correlation Between Carlyle and Foreign Trade
Can any of the company-specific risk be diversified away by investing in both Carlyle and Foreign Trade 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 Foreign Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Foreign Trade Bank, you can compare the effects of market volatilities on Carlyle and Foreign Trade 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 Foreign Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Foreign Trade.
Diversification Opportunities for Carlyle and Foreign Trade
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carlyle and Foreign is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Foreign Trade Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Bank 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 Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Bank has no effect on the direction of Carlyle i.e., Carlyle and Foreign Trade go up and down completely randomly.
Pair Corralation between Carlyle and Foreign Trade
Allowing for the 90-day total investment horizon Carlyle is expected to generate 1.11 times less return on investment than Foreign Trade. In addition to that, Carlyle is 1.32 times more volatile than Foreign Trade Bank. It trades about 0.07 of its total potential returns per unit of risk. Foreign Trade Bank is currently generating about 0.11 per unit of volatility. If you would invest 1,454 in Foreign Trade Bank on August 28, 2024 and sell it today you would earn a total of 1,887 from holding Foreign Trade Bank or generate 129.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Foreign Trade Bank
Performance |
| Timeline |
| Carlyle Group |
| Foreign Trade Bank |
Carlyle and Foreign Trade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Foreign Trade
The main advantage of trading using opposite Carlyle and Foreign Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Foreign Trade 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 Foreign Trade will offset losses from the drop in Foreign Trade's long position.| Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International | Carlyle vs. Barloworld Ltd ADR |
| Foreign Trade vs. Banco Santander Chile | Foreign Trade vs. Bancolombia SA ADR | Foreign Trade vs. Banco Bradesco SA | Foreign Trade vs. Credicorp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |