Correlation Between 1812 Brewing and Carlyle Secured

Can any of the company-specific risk be diversified away by investing in both 1812 Brewing 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 1812 Brewing and Carlyle Secured into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 1812 Brewing and Carlyle Secured Lending, you can compare the effects of market volatilities on 1812 Brewing 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 1812 Brewing with a short position of Carlyle Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1812 Brewing and Carlyle Secured.

Diversification Opportunities for 1812 Brewing and Carlyle Secured

-0.15

Correlation Coefficient

1812 Brewing  Carlyle Secured

Good diversification

The 3 months correlation between 1812 and Carlyle is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding 1812 Brewing 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 1812 Brewing 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 1812 Brewing 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 1812 Brewing i.e., 1812 Brewing and Carlyle Secured go up and down completely randomly.

Pair Corralation between 1812 Brewing and Carlyle Secured

Given the investment horizon of 90 days 1812 Brewing is expected to generate 292.83 times more return on investment than Carlyle Secured. However, 1812 Brewing is 292.83 times more volatile than Carlyle Secured Lending. It trades about 0.25 of its potential returns per unit of risk. Carlyle Secured Lending is currently generating about 0.13 per unit of risk. If you would invest  0.01  in 1812 Brewing on September 29, 2024 and sell it today you would lose (0.01) from holding 1812 Brewing or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

1812 Brewing  vs.  Carlyle Secured Lending

1812 Brewing

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 1812 Brewing are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, 1812 Brewing unveiled solid returns over the last few months and may actually be approaching a breakup point.

Carlyle Secured Lending

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Carlyle Secured may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with 1812 Brewing and Carlyle Secured

The main advantage of trading using opposite 1812 Brewing and Carlyle Secured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1812 Brewing 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 1812 Brewing 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.