Correlation Between Carlyle and Israel Acquisitions

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

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

Diversification Opportunities for Carlyle and Israel Acquisitions

0.71

Correlation Coefficient

Carlyle  Israel Acquisitions

Poor diversification

The 3 months correlation between Carlyle and Israel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Israel Acquisitions Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Israel Acquisitions Corp 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 Israel Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Israel Acquisitions Corp has no effect on the direction of Carlyle i.e., Carlyle and Israel Acquisitions go up and down completely randomly.

Pair Corralation between Carlyle and Israel Acquisitions

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 11.93 times more return on investment than Israel Acquisitions. However, Carlyle is 11.93 times more volatile than Israel Acquisitions Corp. It trades about 0.14 of its potential returns per unit of risk. Israel Acquisitions Corp is currently generating about 0.12 per unit of risk. If you would invest  4,276  in Carlyle Group on September 28, 2024 and sell it today you would earn a total of  842.00  from holding Carlyle Group or generate 19.69% return on investment over 90 days.

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

Carlyle Group  vs.  Israel Acquisitions Corp

Carlyle Group

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Israel Acquisitions Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Israel Acquisitions Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Israel Acquisitions is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Carlyle and Israel Acquisitions

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

The idea behind Carlyle Group and Israel Acquisitions Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.