Correlation Between Carlyle and Neuberger Berman

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Can any of the company-specific risk be diversified away by investing in both Carlyle and Neuberger Berman 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 Neuberger Berman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Neuberger Berman IMF, you can compare the effects of market volatilities on Carlyle and Neuberger Berman 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 Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Neuberger Berman.

Diversification Opportunities for Carlyle and Neuberger Berman

-0.57
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Carlyle and Neuberger is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Neuberger Berman IMF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman IMF 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 Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman IMF has no effect on the direction of Carlyle i.e., Carlyle and Neuberger Berman go up and down completely randomly.

Pair Corralation between Carlyle and Neuberger Berman

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 4.32 times more return on investment than Neuberger Berman. However, Carlyle is 4.32 times more volatile than Neuberger Berman IMF. It trades about 0.17 of its potential returns per unit of risk. Neuberger Berman IMF is currently generating about -0.13 per unit of risk. If you would invest  4,891  in Carlyle Group on August 24, 2024 and sell it today you would earn a total of  474.00  from holding Carlyle Group or generate 9.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Carlyle Group  vs.  Neuberger Berman IMF

 Performance 
       Timeline  
Carlyle Group 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.
Neuberger Berman IMF 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Neuberger Berman IMF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Neuberger Berman is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Carlyle and Neuberger Berman Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Carlyle and Neuberger Berman

The main advantage of trading using opposite Carlyle and Neuberger Berman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Neuberger Berman 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 Neuberger Berman will offset losses from the drop in Neuberger Berman's long position.
The idea behind Carlyle Group and Neuberger Berman IMF 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.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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