Correlation Between Carlyle and Oxford Square

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

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

Diversification Opportunities for Carlyle and Oxford Square

0.81

Correlation Coefficient

Carlyle  Oxford Square

Very poor diversification

The 3 months correlation between Carlyle and Oxford is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Group and Oxford Square Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Square Capital 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 Oxford Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Square Capital has no effect on the direction of Carlyle i.e., Carlyle and Oxford Square go up and down completely randomly.

Pair Corralation between Carlyle and Oxford Square

Allowing for the 90-day total investment horizon Carlyle Group is expected to generate 3.89 times more return on investment than Oxford Square. However, Carlyle is 3.89 times more volatile than Oxford Square Capital. It trades about 0.07 of its potential returns per unit of risk. Oxford Square Capital is currently generating about 0.04 per unit of risk. If you would invest  5,086  in Carlyle Group on September 19, 2024 and sell it today you would earn a total of  110.50  from holding Carlyle Group or generate 2.17% return on investment over 90 days.

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

Carlyle Group  vs.  Oxford Square Capital

Carlyle Group

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Carlyle may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oxford Square Capital

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Square Capital are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Oxford Square is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carlyle and Oxford Square

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

The idea behind Carlyle Group and Oxford Square 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.

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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.