Correlation Between Affiliated Managers and Blue Owl

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

By analyzing existing cross correlation between Affiliated Managers Group and Blue Owl Capital, you can compare the effects of market volatilities on Affiliated Managers and Blue Owl 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 Affiliated Managers with a short position of Blue Owl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Blue Owl.

Diversification Opportunities for Affiliated Managers and Blue Owl

0.85

Correlation Coefficient

Affiliated Managers  Blue Owl

Very poor diversification

The 3 months correlation between Affiliated and Blue is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and Blue Owl Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Owl Capital and Affiliated Managers 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 Affiliated Managers Group are associated (or correlated) with Blue Owl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Owl Capital has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and Blue Owl go up and down completely randomly.

Pair Corralation between Affiliated Managers and Blue Owl

Considering the 90-day investment horizon Affiliated Managers Group is expected to generate 0.61 times more return on investment than Blue Owl. However, Affiliated Managers Group is 1.63 times less risky than Blue Owl. It trades about -0.07 of its potential returns per unit of risk. Blue Owl Capital is currently generating about -0.07 per unit of risk. If you would invest  18,524  in Affiliated Managers Group on December 29, 2024 and sell it today you would lose (1,451) from holding Affiliated Managers Group or give up 7.83% of portfolio value over 90 days.

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

Affiliated Managers Group  vs.  Blue Owl Capital

Affiliated Managers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Affiliated Managers Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's primary indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Blue Owl Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Owl Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Affiliated Managers and Blue Owl

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

The idea behind Affiliated Managers Group and Blue Owl Capital 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.