Correlation Between Great Elm and Carlyle Secured
Can any of the company-specific risk be diversified away by investing in both Great Elm and Carlyle Secured 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 Great Elm and Carlyle Secured into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Elm Group and Carlyle Secured Lending, you can compare the effects of market volatilities on Great Elm and Carlyle Secured 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 Great Elm with a short position of Carlyle Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and Carlyle Secured.
Diversification Opportunities for Great Elm and Carlyle Secured
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Great and Carlyle is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Group and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending and Great Elm 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 Great Elm Group are associated (or correlated) with Carlyle Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of Great Elm i.e., Great Elm and Carlyle Secured go up and down completely randomly.
Pair Corralation between Great Elm and Carlyle Secured
Considering the 90-day investment horizon Great Elm Group is expected to generate 1.59 times more return on investment than Carlyle Secured. However, Great Elm is 1.59 times more volatile than Carlyle Secured Lending. It trades about 0.18 of its potential returns per unit of risk. Carlyle Secured Lending is currently generating about -0.03 per unit of risk. If you would invest 172.00 in Great Elm Group on August 29, 2024 and sell it today you would earn a total of 12.00 from holding Great Elm Group or generate 6.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Elm Group vs. Carlyle Secured Lending
Performance |
| Timeline |
| Great Elm Group |
| Carlyle Secured Lending |
Great Elm and Carlyle Secured Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Elm and Carlyle Secured
The main advantage of trading using opposite Great Elm and Carlyle Secured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm position performs unexpectedly, Carlyle Secured 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 Secured will offset losses from the drop in Carlyle Secured's long position.| Great Elm vs. Aurora Innovation | Great Elm vs. HUMANA INC | Great Elm vs. Aquagold International | Great Elm vs. Barloworld Ltd ADR |
| Carlyle Secured vs. Aurora Innovation | Carlyle Secured vs. HUMANA INC | Carlyle Secured vs. Aquagold International | Carlyle Secured vs. Barloworld Ltd ADR |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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