Correlation Between Brookfield Asset and Carlyle
Can any of the company-specific risk be diversified away by investing in both Brookfield Asset 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 Brookfield Asset and Carlyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Asset Management and Carlyle Group, you can compare the effects of market volatilities on Brookfield Asset 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 Brookfield Asset with a short position of Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Asset and Carlyle.
Diversification Opportunities for Brookfield Asset and Carlyle
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brookfield and Carlyle is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group and Brookfield Asset 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 Brookfield Asset Management 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 Brookfield Asset i.e., Brookfield Asset and Carlyle go up and down completely randomly.
Pair Corralation between Brookfield Asset and Carlyle
Considering the 90-day investment horizon Brookfield Asset is expected to generate 1.83 times less return on investment than Carlyle. But when comparing it to its historical volatility, Brookfield Asset Management is 1.17 times less risky than Carlyle. It trades about 0.13 of its potential returns per unit of risk. Carlyle Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,733 in Carlyle Group on January 20, 2024 and sell it today you would earn a total of 1,635 from holding Carlyle Group or generate 59.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Asset Management vs. Carlyle Group
Performance |
| Timeline |
| Brookfield Asset Man |
| Carlyle Group |
Brookfield Asset and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Asset and Carlyle
The main advantage of trading using opposite Brookfield Asset and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Asset 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.| Brookfield Asset vs. KKR Co LP | Brookfield Asset vs. Blackstone Group | Brookfield Asset vs. Apollo Global Management | Brookfield Asset vs. T Rowe Price |
| Carlyle vs. Apollo Global Management | Carlyle vs. Blackstone Group | Carlyle vs. Brookfield Asset Management | Carlyle vs. Ares Management LP |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |