Correlation Between Carlyle and Hancock Whitney
Can any of the company-specific risk be diversified away by investing in both Carlyle and Hancock Whitney 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 Hancock Whitney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Carlyle Group and Hancock Whitney, you can compare the effects of market volatilities on Carlyle and Hancock Whitney 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 Hancock Whitney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Hancock Whitney.
Diversification Opportunities for Carlyle and Hancock Whitney
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlyle and Hancock is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Carlyle Group and Hancock Whitney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney 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 The Carlyle Group are associated (or correlated) with Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney has no effect on the direction of Carlyle i.e., Carlyle and Hancock Whitney go up and down completely randomly.
Pair Corralation between Carlyle and Hancock Whitney
Assuming the 90 days horizon The Carlyle Group is expected to under-perform the Hancock Whitney. But the stock apears to be less risky and, when comparing its historical volatility, The Carlyle Group is 1.24 times less risky than Hancock Whitney. The stock trades about -0.19 of its potential returns per unit of risk. The Hancock Whitney is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,485 in Hancock Whitney on August 24, 2024 and sell it today you would lose (38.00) from holding Hancock Whitney or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Carlyle Group vs. Hancock Whitney
Performance |
| Timeline |
| Carlyle Group |
| Hancock Whitney |
Carlyle and Hancock Whitney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Hancock Whitney
The main advantage of trading using opposite Carlyle and Hancock Whitney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Hancock Whitney 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 Hancock Whitney will offset losses from the drop in Hancock Whitney's long position.The idea behind The Carlyle Group and Hancock Whitney pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hancock Whitney vs. Office Properties Income | Hancock Whitney vs. Brighthouse Financial | Hancock Whitney vs. American Financial Group | Hancock Whitney vs. American Financial Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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