Correlation Between Carlyle and New Mountain
Can any of the company-specific risk be diversified away by investing in both Carlyle and New Mountain 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 New Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and New Mountain Finance, you can compare the effects of market volatilities on Carlyle and New Mountain 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 New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and New Mountain.
Diversification Opportunities for Carlyle and New Mountain
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carlyle and New is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance 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 New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of Carlyle i.e., Carlyle and New Mountain go up and down completely randomly.
Pair Corralation between Carlyle and New Mountain
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 3.08 times more return on investment than New Mountain. However, Carlyle is 3.08 times more volatile than New Mountain Finance. It trades about 0.1 of its potential returns per unit of risk. New Mountain Finance is currently generating about 0.01 per unit of risk. If you would invest 3,336 in Carlyle Group on August 24, 2024 and sell it today you would earn a total of 2,029 from holding Carlyle Group or generate 60.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. New Mountain Finance
Performance |
| Timeline |
| Carlyle Group |
| New Mountain Finance |
Carlyle and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and New Mountain
The main advantage of trading using opposite Carlyle and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain's long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| New Mountain vs. Invesco Advantage MIT | New Mountain vs. Invesco Municipal Trust | New Mountain vs. Invesco California Value | New Mountain vs. Victory Capital Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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