Correlation Between Carlyle and PJT Partners
Can any of the company-specific risk be diversified away by investing in both Carlyle and PJT Partners 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 PJT Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and PJT Partners, you can compare the effects of market volatilities on Carlyle and PJT Partners 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 PJT Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and PJT Partners.
Diversification Opportunities for Carlyle and PJT Partners
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Carlyle and PJT is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and PJT Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJT Partners 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 PJT Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJT Partners has no effect on the direction of Carlyle i.e., Carlyle and PJT Partners go up and down completely randomly.
Pair Corralation between Carlyle and PJT Partners
Allowing for the 90-day total investment horizon Carlyle is expected to generate 4.32 times less return on investment than PJT Partners. But when comparing it to its historical volatility, Carlyle Group is 1.34 times less risky than PJT Partners. It trades about 0.08 of its potential returns per unit of risk. PJT Partners is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 13,782 in PJT Partners on August 31, 2024 and sell it today you would earn a total of 2,737 from holding PJT Partners or generate 19.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. PJT Partners
Performance |
| Timeline |
| Carlyle Group |
| PJT Partners |
Carlyle and PJT Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and PJT Partners
The main advantage of trading using opposite Carlyle and PJT Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, PJT Partners 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 PJT Partners will offset losses from the drop in PJT Partners' long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| PJT Partners vs. Scully Royalty | PJT Partners vs. Piper Sandler Companies | PJT Partners vs. Evercore Partners | PJT Partners 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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