Correlation Between Carlyle and Noah Holdings
Can any of the company-specific risk be diversified away by investing in both Carlyle and Noah 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 Noah 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 Noah Holdings, you can compare the effects of market volatilities on Carlyle and Noah 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 Noah Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Noah Holdings.
Diversification Opportunities for Carlyle and Noah Holdings
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlyle and Noah is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Noah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noah 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 Noah Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noah Holdings has no effect on the direction of Carlyle i.e., Carlyle and Noah Holdings go up and down completely randomly.
Pair Corralation between Carlyle and Noah Holdings
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.65 times more return on investment than Noah Holdings. However, Carlyle Group is 1.54 times less risky than Noah Holdings. It trades about 0.07 of its potential returns per unit of risk. Noah Holdings is currently generating about 0.02 per unit of risk. If you would invest 2,842 in Carlyle Group on August 26, 2024 and sell it today you would earn a total of 2,437 from holding Carlyle Group or generate 85.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Noah Holdings
Performance |
| Timeline |
| Carlyle Group |
| Noah Holdings |
Carlyle and Noah Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Noah Holdings
The main advantage of trading using opposite Carlyle and Noah Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Noah 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 Noah Holdings will offset losses from the drop in Noah Holdings' long position.| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International |
| Noah Holdings vs. MFS Investment Grade | Noah Holdings vs. Invesco High Income | Noah Holdings vs. Eaton Vance National | Noah Holdings vs. Nuveen California Select |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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