Correlation Between Carlyle and FS Credit
Can any of the company-specific risk be diversified away by investing in both Carlyle and FS Credit 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 FS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and FS Credit Opportunities, you can compare the effects of market volatilities on Carlyle and FS Credit 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 FS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and FS Credit.
Diversification Opportunities for Carlyle and FS Credit
Very poor diversification
The 3 months correlation between Carlyle and FSCO is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and FS Credit Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FS Credit Opportunities 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 FS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FS Credit Opportunities has no effect on the direction of Carlyle i.e., Carlyle and FS Credit go up and down completely randomly.
Pair Corralation between Carlyle and FS Credit
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 2.05 times more return on investment than FS Credit. However, Carlyle is 2.05 times more volatile than FS Credit Opportunities. It trades about 0.07 of its potential returns per unit of risk. FS Credit Opportunities is currently generating about 0.13 per unit of risk. If you would invest 3,337 in Carlyle Group on September 12, 2024 and sell it today you would earn a total of 1,902 from holding Carlyle Group or generate 57.0% 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. FS Credit Opportunities
Performance |
| Timeline |
| Carlyle Group |
| FS Credit Opportunities |
Carlyle and FS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and FS Credit
The main advantage of trading using opposite Carlyle and FS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, FS Credit 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 FS Credit will offset losses from the drop in FS Credit's long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| FS Credit vs. MFS Investment Grade | FS Credit vs. Eaton Vance National | FS Credit vs. Federated Premier Municipal | FS Credit vs. Brightsphere Investment Group |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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