Correlation Between Southern and Carlyle
Can any of the company-specific risk be diversified away by investing in both Southern 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 Southern and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Co and The Carlyle Group, you can compare the effects of market volatilities on Southern 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 Southern with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern and Carlyle.
Diversification Opportunities for Southern and Carlyle
Modest diversification
The 3 months correlation between Southern and Carlyle is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Southern Co and The Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Southern 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 Southern 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 Southern i.e., Southern and Carlyle go up and down completely randomly.
Pair Corralation between Southern and Carlyle
Given the investment horizon of 90 days Southern Co is expected to generate 1.06 times more return on investment than Carlyle. However, Southern is 1.06 times more volatile than The Carlyle Group. It trades about -0.12 of its potential returns per unit of risk. The Carlyle Group is currently generating about -0.15 per unit of risk. If you would invest 2,256 in Southern Co on August 28, 2024 and sell it today you would lose (45.00) from holding Southern Co or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Co vs. The Carlyle Group
Performance |
| Timeline |
| Southern |
| Carlyle Group |
Southern and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern and Carlyle
The main advantage of trading using opposite Southern and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern 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.| Southern vs. Southern Co | Southern vs. Southern Company Series | Southern vs. ATT Inc | Southern vs. Aegon Funding |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |