Correlation Between Spring Valley and Carlyle
Can any of the company-specific risk be diversified away by investing in both Spring Valley 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 Spring Valley and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spring Valley Acquisition and Carlyle Group, you can compare the effects of market volatilities on Spring Valley 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 Spring Valley with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spring Valley and Carlyle.
Diversification Opportunities for Spring Valley and Carlyle
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spring and Carlyle is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Spring Valley 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 Spring Valley Acquisition 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 Spring Valley i.e., Spring Valley and Carlyle go up and down completely randomly.
Pair Corralation between Spring Valley and Carlyle
Given the investment horizon of 90 days Spring Valley Acquisition is expected to under-perform the Carlyle. But the stock apears to be less risky and, when comparing its historical volatility, Spring Valley Acquisition is 3.23 times less risky than Carlyle. The stock trades about -0.06 of its potential returns per unit of risk. The Carlyle Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,940 in Carlyle Group on August 23, 2024 and sell it today you would earn a total of 339.00 from holding Carlyle Group or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spring Valley Acquisition vs. Carlyle Group
Performance |
| Timeline |
| Spring Valley Acquisition |
| Carlyle Group |
Spring Valley and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spring Valley and Carlyle
The main advantage of trading using opposite Spring Valley and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Valley 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.| Spring Valley vs. ABIVAX Socit Anonyme | Spring Valley vs. SCOR PK | Spring Valley vs. HUMANA INC | Spring Valley vs. Aquagold International |
| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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