Correlation Between Carlyle and Moelis
Can any of the company-specific risk be diversified away by investing in both Carlyle and Moelis 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 Moelis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Moelis Co, you can compare the effects of market volatilities on Carlyle and Moelis 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 Moelis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Moelis.
Diversification Opportunities for Carlyle and Moelis
Good diversification
The 3 months correlation between Carlyle and Moelis is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Moelis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moelis 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 Moelis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moelis has no effect on the direction of Carlyle i.e., Carlyle and Moelis go up and down completely randomly.
Pair Corralation between Carlyle and Moelis
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.7 times more return on investment than Moelis. However, Carlyle Group is 1.44 times less risky than Moelis. It trades about -0.02 of its potential returns per unit of risk. Moelis Co is currently generating about -0.04 per unit of risk. If you would invest 4,644 in Carlyle Group on January 26, 2024 and sell it today you would lose (32.00) from holding Carlyle Group or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Carlyle Group vs. Moelis Co
Performance |
| Timeline |
| Carlyle Group |
| Moelis |
Carlyle and Moelis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Moelis
The main advantage of trading using opposite Carlyle and Moelis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Moelis 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 Moelis will offset losses from the drop in Moelis' long position.| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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