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 The 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

-0.64

Correlation Coefficient

Carlyle  Oxford Square

Excellent diversification

The 3 months correlation between Carlyle and Oxford is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding The 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 The 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

Assuming the 90 days horizon The Carlyle Group is expected to under-perform the Oxford Square. In addition to that, Carlyle is 2.8 times more volatile than Oxford Square Capital. It trades about -0.3 of its total potential returns per unit of risk. Oxford Square Capital is currently generating about 0.02 per unit of volatility. If you would invest  2,470  in Oxford Square Capital on September 24, 2024 and sell it today you would earn a total of  3.75  from holding Oxford Square Capital or generate 0.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

The Carlyle Group  vs.  Oxford Square Capital

Carlyle Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Carlyle Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Oxford Square Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Square Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Oxford Square is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 The 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.