Correlation Between Carlyle and Everest
Can any of the company-specific risk be diversified away by investing in both Carlyle and Everest 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 Everest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Everest Group, you can compare the effects of market volatilities on Carlyle and Everest 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 Everest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Everest.
Diversification Opportunities for Carlyle and Everest
Very good diversification
The 3 months correlation between Carlyle and Everest is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Group 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 Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of Carlyle i.e., Carlyle and Everest go up and down completely randomly.
Pair Corralation between Carlyle and Everest
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 1.37 times more return on investment than Everest. However, Carlyle is 1.37 times more volatile than Everest Group. It trades about 0.1 of its potential returns per unit of risk. Everest Group is currently generating about 0.0 per unit of risk. If you would invest 3,322 in Carlyle Group on August 26, 2024 and sell it today you would earn a total of 2,043 from holding Carlyle Group or generate 61.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Everest Group
Performance |
| Timeline |
| Carlyle Group |
| Everest Group |
Carlyle and Everest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Everest
The main advantage of trading using opposite Carlyle and Everest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Everest 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 Everest will offset losses from the drop in Everest's long position.| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International |
| Everest vs. Brookfield Wealth Solutions | Everest vs. Reinsurance Group of | Everest vs. Renaissancere Holdings | Everest vs. Greenlight Capital Re |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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