Correlation Between Carlyle and Gores Holdings
Can any of the company-specific risk be diversified away by investing in both Carlyle and Gores Holdings 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 Gores Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Gores Holdings IX, you can compare the effects of market volatilities on Carlyle and Gores Holdings 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 Gores Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Gores Holdings.
Diversification Opportunities for Carlyle and Gores Holdings
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlyle and Gores is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Gores Holdings IX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gores Holdings IX 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 Gores Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gores Holdings IX has no effect on the direction of Carlyle i.e., Carlyle and Gores Holdings go up and down completely randomly.
Pair Corralation between Carlyle and Gores Holdings
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 1.4 times more return on investment than Gores Holdings. However, Carlyle is 1.4 times more volatile than Gores Holdings IX. It trades about 0.09 of its potential returns per unit of risk. Gores Holdings IX is currently generating about -0.03 per unit of risk. If you would invest 4,275 in Carlyle Group on September 1, 2024 and sell it today you would earn a total of 1,048 from holding Carlyle Group or generate 24.51% 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. Gores Holdings IX
Performance |
| Timeline |
| Carlyle Group |
| Gores Holdings IX |
Carlyle and Gores Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Gores Holdings
The main advantage of trading using opposite Carlyle and Gores Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Gores Holdings 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 Gores Holdings will offset losses from the drop in Gores Holdings' long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| Gores Holdings vs. Visa Class A | Gores Holdings vs. Diamond Hill Investment | Gores Holdings vs. Distoken Acquisition | Gores Holdings vs. Associated Capital 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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