Correlation Between Carlyle and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Carlyle and BNY Mellon 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 BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and BNY Mellon Strategic, you can compare the effects of market volatilities on Carlyle and BNY Mellon 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 BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and BNY Mellon.
Diversification Opportunities for Carlyle and BNY Mellon
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlyle and BNY is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and BNY Mellon Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon Strategic 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 BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon Strategic has no effect on the direction of Carlyle i.e., Carlyle and BNY Mellon go up and down completely randomly.
Pair Corralation between Carlyle and BNY Mellon
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 3.97 times more return on investment than BNY Mellon. However, Carlyle is 3.97 times more volatile than BNY Mellon Strategic. It trades about 0.14 of its potential returns per unit of risk. BNY Mellon Strategic is currently generating about 0.21 per unit of risk. If you would invest 4,872 in Carlyle Group on September 5, 2024 and sell it today you would earn a total of 376.00 from holding Carlyle Group or generate 7.72% 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. BNY Mellon Strategic
Performance |
| Timeline |
| Carlyle Group |
| BNY Mellon Strategic |
Carlyle and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and BNY Mellon
The main advantage of trading using opposite Carlyle and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.The idea behind Carlyle Group and BNY Mellon Strategic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BNY Mellon vs. Blackrock Muniholdings Closed | BNY Mellon vs. DTF Tax Free | BNY Mellon vs. John Hancock Income | BNY Mellon vs. MFS Investment Grade |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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