Correlation Between Carlyle Secured and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both Carlyle Secured and NXG NextGen 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 NXG NextGen 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 NXG NextGen Infrastructure, you can compare the effects of market volatilities on Carlyle Secured and NXG NextGen 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 NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and NXG NextGen.
Diversification Opportunities for Carlyle Secured and NXG NextGen
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Carlyle and NXG is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr 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 NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Carlyle Secured i.e., Carlyle Secured and NXG NextGen go up and down completely randomly.
Pair Corralation between Carlyle Secured and NXG NextGen
Given the investment horizon of 90 days Carlyle Secured is expected to generate 1.3 times less return on investment than NXG NextGen. But when comparing it to its historical volatility, Carlyle Secured Lending is 1.77 times less risky than NXG NextGen. It trades about 0.08 of its potential returns per unit of risk. NXG NextGen Infrastructure is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,077 in NXG NextGen Infrastructure on August 28, 2024 and sell it today you would earn a total of 1,920 from holding NXG NextGen Infrastructure or generate 62.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Secured Lending vs. NXG NextGen Infrastructure
Performance |
| Timeline |
| Carlyle Secured Lending |
| NXG NextGen Infrastr |
Carlyle Secured and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle Secured and NXG NextGen
The main advantage of trading using opposite Carlyle Secured and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle Secured position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen's long position.| Carlyle Secured vs. PowerUp Acquisition Corp | Carlyle Secured vs. Aurora Innovation | Carlyle Secured vs. HUMANA INC | Carlyle Secured vs. Aquagold International |
| NXG NextGen vs. PowerUp Acquisition Corp | NXG NextGen vs. Aurora Innovation | NXG NextGen vs. HUMANA INC | NXG NextGen vs. Aquagold International |
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 Stocks Directory module to find actively traded stocks across global markets.
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