Correlation Between Cion Investment and Carlyle Secured

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

By analyzing existing cross correlation between Cion Investment Corp and Carlyle Secured Lending, you can compare the effects of market volatilities on Cion Investment and Carlyle Secured 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 Cion Investment with a short position of Carlyle Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cion Investment and Carlyle Secured.

Diversification Opportunities for Cion Investment and Carlyle Secured

0.7

Correlation Coefficient

Cion Investment  Carlyle Secured

Poor diversification

The 3 months correlation between Cion and Carlyle is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cion Investment Corp and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending and Cion Investment 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 Cion Investment Corp are associated (or correlated) with Carlyle Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of Cion Investment i.e., Cion Investment and Carlyle Secured go up and down completely randomly.

Pair Corralation between Cion Investment and Carlyle Secured

Given the investment horizon of 90 days Cion Investment Corp is expected to under-perform the Carlyle Secured. But the stock apears to be less risky and, when comparing its historical volatility, Cion Investment Corp is 1.05 times less risky than Carlyle Secured. The stock trades about -0.01 of its potential returns per unit of risk. The Carlyle Secured Lending is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,661  in Carlyle Secured Lending on September 2, 2024 and sell it today you would earn a total of  72.00  from holding Carlyle Secured Lending or generate 4.33% return on investment over 90 days.

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

Cion Investment Corp  vs.  Carlyle Secured Lending

Cion Investment Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cion Investment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Cion Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Carlyle Secured Lending

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Carlyle Secured is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cion Investment and Carlyle Secured

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

The idea behind Cion Investment Corp and Carlyle Secured Lending 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.