Correlation Between Carlyle and Western Union
Can any of the company-specific risk be diversified away by investing in both Carlyle and Western Union 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 Western Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Western Union Co, you can compare the effects of market volatilities on Carlyle and Western Union 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 Western Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Western Union.
Diversification Opportunities for Carlyle and Western Union
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carlyle and Western is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Western Union Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Union 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 Western Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Union has no effect on the direction of Carlyle i.e., Carlyle and Western Union go up and down completely randomly.
Pair Corralation between Carlyle and Western Union
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 1.93 times more return on investment than Western Union. However, Carlyle is 1.93 times more volatile than Western Union Co. It trades about 0.08 of its potential returns per unit of risk. Western Union Co is currently generating about -0.26 per unit of risk. If you would invest 4,940 in Carlyle Group on August 23, 2024 and sell it today you would earn a total of 183.00 from holding Carlyle Group or generate 3.7% 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. Western Union Co
Performance |
| Timeline |
| Carlyle Group |
| Western Union |
Carlyle and Western Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Western Union
The main advantage of trading using opposite Carlyle and Western Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Western Union 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 Western Union will offset losses from the drop in Western Union's long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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