Correlation Between Carlyle and Investor

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

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

Diversification Opportunities for Carlyle and Investor

0.42

Correlation Coefficient

Carlyle  Investor

Very weak diversification

The 3 months correlation between Carlyle and Investor is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Investor AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investor AB ser 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 Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investor AB ser has no effect on the direction of Carlyle i.e., Carlyle and Investor go up and down completely randomly.

Pair Corralation between Carlyle and Investor

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 1.15 times more return on investment than Investor. However, Carlyle is 1.15 times more volatile than Investor AB ser. It trades about 0.3 of its potential returns per unit of risk. Investor AB ser is currently generating about -0.01 per unit of risk. If you would invest  3,967  in Carlyle Group on May 6, 2025 and sell it today you would earn a total of  1,904  from holding Carlyle Group or generate 48.0% return on investment over 90 days.

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

Carlyle Group  vs.  Investor AB ser

Carlyle Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Carlyle reported solid returns over the last few months and may actually be approaching a breakup point.

Investor AB ser

Risk-Adjusted Performance

Very Weak

Over the last 90 days Investor AB ser has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Investor is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carlyle and Investor

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

The idea behind Carlyle Group and Investor AB ser 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.