Correlation Between Carlyle and Brookfield Asset
Can any of the company-specific risk be diversified away by investing in both Carlyle and Brookfield Asset 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 Brookfield Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Group and Brookfield Asset Management, you can compare the effects of market volatilities on Carlyle and Brookfield Asset 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 Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle and Brookfield Asset.
Diversification Opportunities for Carlyle and Brookfield Asset
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlyle and Brookfield is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man 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 Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Carlyle i.e., Carlyle and Brookfield Asset go up and down completely randomly.
Pair Corralation between Carlyle and Brookfield Asset
Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 0.93 times more return on investment than Brookfield Asset. However, Carlyle Group is 1.07 times less risky than Brookfield Asset. It trades about -0.08 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about -0.21 per unit of risk. If you would invest 4,678 in Carlyle Group on January 27, 2024 and sell it today you would lose (116.00) from holding Carlyle Group or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Group vs. Brookfield Asset Management
Performance |
| Timeline |
| Carlyle Group |
| Brookfield Asset Man |
Carlyle and Brookfield Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle and Brookfield Asset
The main advantage of trading using opposite Carlyle and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle position performs unexpectedly, Brookfield Asset 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 Brookfield Asset will offset losses from the drop in Brookfield Asset's long position.The idea behind Carlyle Group and Brookfield Asset Management 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.| Brookfield Asset vs. State Street Corp | Brookfield Asset vs. Apollo Global Management | Brookfield Asset vs. Brookfield Corp |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
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