Correlation Between US Global and Carlyle
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and Carlyle Group, you can compare the effects of market volatilities on US Global 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 US Global with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Carlyle.
Diversification Opportunities for US Global and Carlyle
Average diversification
The 3 months correlation between GROW and Carlyle is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and US Global 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 US Global Investors 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 US Global i.e., US Global and Carlyle go up and down completely randomly.
Pair Corralation between US Global and Carlyle
Given the investment horizon of 90 days US Global Investors is expected to generate 0.46 times more return on investment than Carlyle. However, US Global Investors is 2.19 times less risky than Carlyle. It trades about 0.05 of its potential returns per unit of risk. Carlyle Group is currently generating about -0.16 per unit of risk. If you would invest 242.00 in US Global Investors on November 18, 2024 and sell it today you would earn a total of 2.00 from holding US Global Investors or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. Carlyle Group
Performance |
| Timeline |
| US Global Investors |
| Carlyle Group |
US Global and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Carlyle
The main advantage of trading using opposite US Global and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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