Correlation Between Carlyle Secured and Diamond Hill
Can any of the company-specific risk be diversified away by investing in both Carlyle Secured and Diamond Hill 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 Secured and Diamond Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Secured Lending and Diamond Hill Investment, you can compare the effects of market volatilities on Carlyle Secured and Diamond Hill 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 Secured with a short position of Diamond Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and Diamond Hill.
Diversification Opportunities for Carlyle Secured and Diamond Hill
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlyle and Diamond is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending and Diamond Hill Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Investment and Carlyle Secured 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 Secured Lending are associated (or correlated) with Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Investment has no effect on the direction of Carlyle Secured i.e., Carlyle Secured and Diamond Hill go up and down completely randomly.
Pair Corralation between Carlyle Secured and Diamond Hill
Given the investment horizon of 90 days Carlyle Secured Lending is expected to generate 0.77 times more return on investment than Diamond Hill. However, Carlyle Secured Lending is 1.29 times less risky than Diamond Hill. It trades about 0.08 of its potential returns per unit of risk. Diamond Hill Investment is currently generating about 0.01 per unit of risk. If you would invest 1,115 in Carlyle Secured Lending on August 28, 2024 and sell it today you would earn a total of 585.00 from holding Carlyle Secured Lending or generate 52.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Secured Lending vs. Diamond Hill Investment
Performance |
| Timeline |
| Carlyle Secured Lending |
| Diamond Hill Investment |
Carlyle Secured and Diamond Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle Secured and Diamond Hill
The main advantage of trading using opposite Carlyle Secured and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle Secured position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill's long position.| Carlyle Secured vs. PowerUp Acquisition Corp | Carlyle Secured vs. Aurora Innovation | Carlyle Secured vs. HUMANA INC | Carlyle Secured vs. Aquagold International |
| Diamond Hill vs. Federated Premier Municipal | Diamond Hill vs. Blackrock Muniyield | Diamond Hill vs. NXG NextGen Infrastructure | Diamond Hill vs. Federated Investors B |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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