Correlation Between Carlyle and LPL Financial
Can any of the company-specific risk be diversified away by investing in both Carlyle and LPL Financial 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 LPL Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and LPL Financial Holdings, you can compare the effects of market volatilities on Carlyle and LPL Financial 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 LPL Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and LPL Financial.
Diversification Opportunities for Carlyle and LPL Financial
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carlyle and LPL is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and LPL Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPL Financial Holdings 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 LPL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPL Financial Holdings has no effect on the direction of Carlyle i.e., Carlyle and LPL Financial go up and down completely randomly.
Pair Corralation between Carlyle and LPL Financial
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 1.09 times more return on investment than LPL Financial. However, Carlyle is 1.09 times more volatile than LPL Financial Holdings. It trades about 0.09 of its potential returns per unit of risk. LPL Financial Holdings is currently generating about 0.08 per unit of risk. If you would invest 2,826 in Carlyle Group on August 31, 2024 and sell it today you would earn a total of 2,497 from holding Carlyle Group or generate 88.36% 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. LPL Financial Holdings
Performance |
| Timeline |
| Carlyle Group |
| LPL Financial Holdings |
Carlyle and LPL Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and LPL Financial
The main advantage of trading using opposite Carlyle and LPL Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, LPL Financial 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 LPL Financial will offset losses from the drop in LPL Financial's long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| LPL Financial vs. Tradeweb Markets | LPL Financial vs. Raymond James Financial | LPL Financial vs. PJT Partners | LPL Financial vs. Moelis Co |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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