Correlation Between NorthView Acquisition and Carlyle

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

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

Diversification Opportunities for NorthView Acquisition and Carlyle

-0.28

Correlation Coefficient

NorthView Acquisition  Carlyle

Very good diversification

The 3 months correlation between NorthView and Carlyle is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NorthView Acquisition and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and NorthView Acquisition 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 NorthView Acquisition are associated (or correlated) with Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of NorthView Acquisition i.e., NorthView Acquisition and Carlyle go up and down completely randomly.

Pair Corralation between NorthView Acquisition and Carlyle

Assuming the 90 days horizon NorthView Acquisition is expected to under-perform the Carlyle. In addition to that, NorthView Acquisition is 9.86 times more volatile than Carlyle Group. It trades about -0.02 of its total potential returns per unit of risk. Carlyle Group is currently generating about 0.13 per unit of volatility. If you would invest  4,276  in Carlyle Group on September 29, 2024 and sell it today you would earn a total of  811.00  from holding Carlyle Group or generate 18.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

NorthView Acquisition  vs.  Carlyle Group

NorthView Acquisition

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days NorthView Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Carlyle Group

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 10 (%) 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.

Pair Trading with NorthView Acquisition and Carlyle

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

The idea behind NorthView Acquisition and Carlyle Group 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.