Correlation Between Carlyle and Two Harbors
Can any of the company-specific risk be diversified away by investing in both Carlyle and Two Harbors 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 Two Harbors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Two Harbors Investments, you can compare the effects of market volatilities on Carlyle and Two Harbors 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 Two Harbors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Two Harbors.
Diversification Opportunities for Carlyle and Two Harbors
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carlyle and Two is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Two Harbors Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Two Harbors Investments 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 Two Harbors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Two Harbors Investments has no effect on the direction of Carlyle i.e., Carlyle and Two Harbors go up and down completely randomly.
Pair Corralation between Carlyle and Two Harbors
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 1.85 times more return on investment than Two Harbors. However, Carlyle is 1.85 times more volatile than Two Harbors Investments. It trades about 0.09 of its potential returns per unit of risk. Two Harbors Investments is currently generating about 0.0 per unit of risk. If you would invest 4,243 in Carlyle Group on August 24, 2024 and sell it today you would earn a total of 1,036 from holding Carlyle Group or generate 24.42% 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. Two Harbors Investments
Performance |
| Timeline |
| Carlyle Group |
| Two Harbors Investments |
Carlyle and Two Harbors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Two Harbors
The main advantage of trading using opposite Carlyle and Two Harbors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Two Harbors 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 Two Harbors will offset losses from the drop in Two Harbors' long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| Two Harbors vs. New York Mortgage | Two Harbors vs. ARMOUR Residential REIT | Two Harbors vs. Annaly Capital Management | Two Harbors vs. AGNC Investment Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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