Correlation Between Carlyle and EZCORP

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

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

Diversification Opportunities for Carlyle and EZCORP

-0.79

Correlation Coefficient

Carlyle  EZCORP

Pay attention - limited upside

The 3 months correlation between Carlyle and EZCORP is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and EZCORP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZCORP Inc 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 EZCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZCORP Inc has no effect on the direction of Carlyle i.e., Carlyle and EZCORP go up and down completely randomly.

Pair Corralation between Carlyle and EZCORP

Allowing for the 90-day total investment horizon Carlyle Group is expected to under-perform the EZCORP. In addition to that, Carlyle is 1.88 times more volatile than EZCORP Inc. It trades about -0.16 of its total potential returns per unit of risk. EZCORP Inc is currently generating about 0.2 per unit of volatility. If you would invest  1,247  in EZCORP Inc on January 18, 2025 and sell it today you would earn a total of  346.00  from holding EZCORP Inc or generate 27.75% return on investment over 90 days.

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

Carlyle Group  vs.  EZCORP Inc

Carlyle Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

EZCORP Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EZCORP Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, EZCORP showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carlyle and EZCORP

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

The idea behind Carlyle Group and EZCORP Inc 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.