Correlation Between Carlyle and Brightsphere Investment
Can any of the company-specific risk be diversified away by investing in both Carlyle and Brightsphere Investment 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 Brightsphere Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Brightsphere Investment Group, you can compare the effects of market volatilities on Carlyle and Brightsphere Investment 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 Brightsphere Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Brightsphere Investment.
Diversification Opportunities for Carlyle and Brightsphere Investment
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carlyle and Brightsphere is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Brightsphere Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightsphere Investment 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 Brightsphere Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightsphere Investment has no effect on the direction of Carlyle i.e., Carlyle and Brightsphere Investment go up and down completely randomly.
Pair Corralation between Carlyle and Brightsphere Investment
Allowing for the 90-day total investment horizon Carlyle is expected to generate 2.05 times less return on investment than Brightsphere Investment. In addition to that, Carlyle is 1.37 times more volatile than Brightsphere Investment Group. It trades about 0.14 of its total potential returns per unit of risk. Brightsphere Investment Group is currently generating about 0.41 per unit of volatility. If you would invest 2,644 in Brightsphere Investment Group on August 28, 2024 and sell it today you would earn a total of 456.00 from holding Brightsphere Investment Group or generate 17.25% 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. Brightsphere Investment Group
Performance |
| Timeline |
| Carlyle Group |
| Brightsphere Investment |
Carlyle and Brightsphere Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Brightsphere Investment
The main advantage of trading using opposite Carlyle and Brightsphere Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Brightsphere Investment 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 Brightsphere Investment will offset losses from the drop in Brightsphere Investment'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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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