Correlation Between Carlyle and Diamond Hill
Can any of the company-specific risk be diversified away by investing in both Carlyle and Diamond Hill 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 Carlyle and Diamond Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Diamond Hill Investment, you can compare the effects of market volatilities on Carlyle and Diamond Hill 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 Carlyle with a short position of Diamond Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Diamond Hill.
Diversification Opportunities for Carlyle and Diamond Hill
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carlyle and Diamond is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Diamond Hill Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Investment and Carlyle 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 Carlyle Group are associated (or correlated) with Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Investment has no effect on the direction of Carlyle i.e., Carlyle and Diamond Hill go up and down completely randomly.
Pair Corralation between Carlyle and Diamond Hill
Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the Diamond Hill. In addition to that, Carlyle is 1.38 times more volatile than Diamond Hill Investment. It trades about -0.11 of its total potential returns per unit of risk. Diamond Hill Investment is currently generating about -0.07 per unit of volatility. If you would invest 15,079 in Diamond Hill Investment on January 19, 2024 and sell it today you would lose (239.00) from holding Diamond Hill Investment or give up 1.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Diamond Hill Investment
Performance |
| Timeline |
| Carlyle Group |
| Diamond Hill Investment |
Carlyle and Diamond Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Diamond Hill
The main advantage of trading using opposite Carlyle and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill's long position.| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
| Diamond Hill vs. Federated Premier Municipal | Diamond Hill vs. Blackrock Muniyield | Diamond Hill vs. NXG NextGen Infrastructure | Diamond Hill vs. Federated Investors B |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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