Correlation Between Carlyle and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Carlyle and Federated Premier 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 Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Federated Premier Municipal, you can compare the effects of market volatilities on Carlyle and Federated Premier 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 Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Federated Premier.
Diversification Opportunities for Carlyle and Federated Premier
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carlyle and Federated is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier 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 Federated Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Premier has no effect on the direction of Carlyle i.e., Carlyle and Federated Premier go up and down completely randomly.
Pair Corralation between Carlyle and Federated Premier
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 3.26 times more return on investment than Federated Premier. However, Carlyle is 3.26 times more volatile than Federated Premier Municipal. It trades about 0.25 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about -0.14 per unit of risk. If you would invest 3,822 in Carlyle Group on September 3, 2024 and sell it today you would earn a total of 1,501 from holding Carlyle Group or generate 39.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Federated Premier Municipal
Performance |
| Timeline |
| Carlyle Group |
| Federated Premier |
Carlyle and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Federated Premier
The main advantage of trading using opposite Carlyle and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Federated Premier 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 Federated Premier will offset losses from the drop in Federated Premier's long position.| Carlyle vs. Federated Premier Municipal | Carlyle vs. Blackrock Muniyield | Carlyle vs. Diamond Hill Investment | Carlyle vs. Federated Investors B |
| Federated Premier vs. Tekla Healthcare Investors | Federated Premier vs. Tekla Life Sciences | Federated Premier vs. Cohen Steers Reit | Federated Premier vs. XAI Octagon Floating |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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