Correlation Between Moelis and Carlyle
Can any of the company-specific risk be diversified away by investing in both Moelis 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 Moelis and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moelis Co and Carlyle Group, you can compare the effects of market volatilities on Moelis 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 Moelis with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moelis and Carlyle.
Diversification Opportunities for Moelis and Carlyle
Poor diversification
The 3 months correlation between Moelis and Carlyle is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Moelis 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 Moelis Co 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 Moelis i.e., Moelis and Carlyle go up and down completely randomly.
Pair Corralation between Moelis and Carlyle
Allowing for the 90-day total investment horizon Moelis Co is expected to generate 0.85 times more return on investment than Carlyle. However, Moelis Co is 1.17 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 7,734 in Moelis Co on November 18, 2024 and sell it today you would lose (139.00) from holding Moelis Co or give up 1.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moelis Co vs. Carlyle Group
Performance |
| Timeline |
| Moelis |
| Carlyle Group |
Moelis and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moelis and Carlyle
The main advantage of trading using opposite Moelis and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moelis 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.The idea behind Moelis Co and Carlyle Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Carlyle vs. Horizon Space Acquisition | Carlyle vs. Erayak Power Solution | Carlyle vs. AlphaTime Acquisition Corp | Carlyle vs. Israel Acquisitions Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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