Correlation Between Carlyle Secured and BlackRock

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

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

Diversification Opportunities for Carlyle Secured and BlackRock

0.22

Correlation Coefficient

Carlyle Secured  BlackRock

Modest diversification

The 3 months correlation between Carlyle and BlackRock is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock and Carlyle Secured 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 Secured Lending are associated (or correlated) with BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of Carlyle Secured i.e., Carlyle Secured and BlackRock go up and down completely randomly.

Pair Corralation between Carlyle Secured and BlackRock

Given the investment horizon of 90 days Carlyle Secured Lending is expected to under-perform the BlackRock. In addition to that, Carlyle Secured is 1.04 times more volatile than BlackRock. It trades about -0.01 of its total potential returns per unit of risk. BlackRock is currently generating about 0.27 per unit of volatility. If you would invest  82,412  in BlackRock on July 18, 2024 and sell it today you would earn a total of  18,288  from holding BlackRock or generate 22.19% return on investment over 90 days.

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

Carlyle Secured Lending  vs.  BlackRock

Carlyle Secured Lending

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlyle Secured Lending has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Carlyle Secured is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

BlackRock

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, BlackRock disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carlyle Secured and BlackRock

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

The idea behind Carlyle Secured Lending and BlackRock 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.