Correlation Between Carlyle and Aberdeen Global

Can any of the company-specific risk be diversified away by investing in both Carlyle and Aberdeen Global 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 Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlyle Group and Aberdeen Global IF, you can compare the effects of market volatilities on Carlyle and Aberdeen Global 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 Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Aberdeen Global.

Diversification Opportunities for Carlyle and Aberdeen Global

0.83

Correlation Coefficient

Carlyle  Aberdeen Global

Very poor diversification

The 3 months correlation between Carlyle and Aberdeen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Aberdeen Global IF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global IF 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 Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global IF has no effect on the direction of Carlyle i.e., Carlyle and Aberdeen Global go up and down completely randomly.

Pair Corralation between Carlyle and Aberdeen Global

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 2.13 times more return on investment than Aberdeen Global. However, Carlyle is 2.13 times more volatile than Aberdeen Global IF. It trades about 0.24 of its potential returns per unit of risk. Aberdeen Global IF is currently generating about 0.08 per unit of risk. If you would invest  3,850  in Carlyle Group on September 12, 2024 and sell it today you would earn a total of  1,389  from holding Carlyle Group or generate 36.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Carlyle Group  vs.  Aberdeen Global IF

Carlyle Group

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Aberdeen Global IF

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global IF are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carlyle and Aberdeen Global

The main advantage of trading using opposite Carlyle and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Aberdeen Global 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 Aberdeen Global will offset losses from the drop in Aberdeen Global's long position.

The idea behind Carlyle Group and Aberdeen Global IF pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.