Correlation Between Carlyle and Stepstone
Can any of the company-specific risk be diversified away by investing in both Carlyle and Stepstone 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 Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Stepstone Group, you can compare the effects of market volatilities on Carlyle and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Stepstone.
Diversification Opportunities for Carlyle and Stepstone
Almost no diversification
The 3 months correlation between Carlyle and Stepstone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Carlyle i.e., Carlyle and Stepstone go up and down completely randomly.
Pair Corralation between Carlyle and Stepstone
Allowing for the 90-day total investment horizon Carlyle is expected to generate 1.47 times less return on investment than Stepstone. In addition to that, Carlyle is 1.0 times more volatile than Stepstone Group. It trades about 0.1 of its total potential returns per unit of risk. Stepstone Group is currently generating about 0.15 per unit of volatility. If you would invest 2,098 in Stepstone Group on August 27, 2024 and sell it today you would earn a total of 4,607 from holding Stepstone Group or generate 219.59% 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. Stepstone Group
Performance |
| Timeline |
| Carlyle Group |
| Stepstone Group |
Carlyle and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Stepstone
The main advantage of trading using opposite Carlyle and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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