Correlation Between Everest and Carlyle
Can any of the company-specific risk be diversified away by investing in both Everest and Carlyle 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 Everest and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everest Group and Carlyle Group, you can compare the effects of market volatilities on Everest and Carlyle 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 Everest with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everest and Carlyle.
Diversification Opportunities for Everest and Carlyle
Very good diversification
The 3 months correlation between Everest and Carlyle is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Everest 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 Everest Group are associated (or correlated) with Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of Everest i.e., Everest and Carlyle go up and down completely randomly.
Pair Corralation between Everest and Carlyle
Allowing for the 90-day total investment horizon Everest Group is expected to under-perform the Carlyle. But the stock apears to be less risky and, when comparing its historical volatility, Everest Group is 1.37 times less risky than Carlyle. The stock trades about 0.0 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,322 in Carlyle Group on August 26, 2024 and sell it today you would earn a total of 2,043 from holding Carlyle Group or generate 61.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Everest Group vs. Carlyle Group
Performance |
| Timeline |
| Everest Group |
| Carlyle Group |
Everest and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everest and Carlyle
The main advantage of trading using opposite Everest and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest position performs unexpectedly, Carlyle 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 Carlyle will offset losses from the drop in Carlyle's long position.| Everest vs. Brookfield Wealth Solutions | Everest vs. Reinsurance Group of | Everest vs. Renaissancere Holdings | Everest vs. Greenlight Capital Re |
| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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