Correlation Between NYSE Composite and Carlyle
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and The Carlyle Group, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Carlyle.
Diversification Opportunities for NYSE Composite and Carlyle
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Carlyle is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Carlyle go up and down completely randomly.
Pair Corralation between NYSE Composite and Carlyle
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.92 times more return on investment than Carlyle. However, NYSE Composite is 1.09 times less risky than Carlyle. It trades about 0.21 of its potential returns per unit of risk. The Carlyle Group is currently generating about -0.13 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 57,378 from holding NYSE Composite or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. The Carlyle Group
Performance |
| Timeline |
NYSE Composite and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
The Carlyle Group
Pair trading matchups for Carlyle
Pair Trading with NYSE Composite and Carlyle
The main advantage of trading using opposite NYSE Composite and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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