Correlation Between Stepstone and Carlyle
Can any of the company-specific risk be diversified away by investing in both Stepstone 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 Stepstone and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Carlyle Group, you can compare the effects of market volatilities on Stepstone 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 Stepstone with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Carlyle.
Diversification Opportunities for Stepstone and Carlyle
Almost no diversification
The 3 months correlation between Stepstone and Carlyle is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Stepstone 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 Stepstone Group 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 Stepstone i.e., Stepstone and Carlyle go up and down completely randomly.
Pair Corralation between Stepstone and Carlyle
Given the investment horizon of 90 days Stepstone Group is expected to generate 1.0 times more return on investment than Carlyle. However, Stepstone is 1.0 times more volatile than Carlyle Group. It trades about 0.19 of its potential returns per unit of risk. Carlyle Group is currently generating about 0.09 per unit of risk. If you would invest 2,530 in Stepstone Group on August 27, 2024 and sell it today you would earn a total of 4,175 from holding Stepstone Group or generate 165.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Carlyle Group
Performance |
| Timeline |
| Stepstone Group |
| Carlyle Group |
Stepstone and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Carlyle
The main advantage of trading using opposite Stepstone and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone 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.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Carlyle vs. PowerUp Acquisition Corp | Carlyle vs. Aurora Innovation | Carlyle vs. HUMANA INC | Carlyle vs. Aquagold International |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |