Correlation Between Bank of New York and Carlyle
Can any of the company-specific risk be diversified away by investing in both Bank of New York 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 Bank of New York and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of New and Carlyle Group, you can compare the effects of market volatilities on Bank of New York 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 Bank of New York with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Carlyle.
Diversification Opportunities for Bank of New York and Carlyle
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Carlyle is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Bank of New York 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 Bank of New 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 Bank of New York i.e., Bank of New York and Carlyle go up and down completely randomly.
Pair Corralation between Bank of New York and Carlyle
Allowing for the 90-day total investment horizon Bank of New is expected to generate 0.86 times more return on investment than Carlyle. However, Bank of New is 1.17 times less risky than Carlyle. It trades about 0.1 of its potential returns per unit of risk. Carlyle Group is currently generating about -0.02 per unit of risk. If you would invest 5,661 in Bank of New on January 26, 2024 and sell it today you would earn a total of 134.00 from holding Bank of New or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of New vs. Carlyle Group
Performance |
| Timeline |
| Bank of New York |
| Carlyle Group |
Bank of New York and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Carlyle
The main advantage of trading using opposite Bank of New York and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York 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.| Bank of New York vs. Federated Premier Municipal | Bank of New York vs. Blackrock Muniyield | Bank of New York vs. Diamond Hill Investment | Bank of New York vs. NXG NextGen Infrastructure |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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