Correlation Between Carlyle Secured and Oaktree Specialty

Can any of the company-specific risk be diversified away by investing in both Carlyle Secured and Oaktree Specialty 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 Oaktree Specialty 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 Oaktree Specialty Lending, you can compare the effects of market volatilities on Carlyle Secured and Oaktree Specialty 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 Oaktree Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and Oaktree Specialty.

Diversification Opportunities for Carlyle Secured and Oaktree Specialty

0.0

Correlation Coefficient

Carlyle Secured  Oaktree Specialty

Pay attention - limited upside

The 3 months correlation between Carlyle and Oaktree is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending and Oaktree Specialty Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Specialty Lending 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 Oaktree Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Specialty Lending has no effect on the direction of Carlyle Secured i.e., Carlyle Secured and Oaktree Specialty go up and down completely randomly.

Pair Corralation between Carlyle Secured and Oaktree Specialty

Given the investment horizon of 90 days Carlyle Secured Lending is expected to generate 1.01 times more return on investment than Oaktree Specialty. However, Carlyle Secured is 1.01 times more volatile than Oaktree Specialty Lending. It trades about 0.4 of its potential returns per unit of risk. Oaktree Specialty Lending is currently generating about -0.21 per unit of risk. If you would invest  1,712  in Carlyle Secured Lending on October 8, 2024 and sell it today you would earn a total of  109.00  from holding Carlyle Secured Lending or generate 6.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Carlyle Secured Lending  vs.  Oaktree Specialty Lending

Carlyle Secured Lending

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental drivers, Carlyle Secured may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Oaktree Specialty Lending

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oaktree Specialty Lending has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Oaktree Specialty is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Carlyle Secured and Oaktree Specialty

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

The idea behind Carlyle Secured Lending and Oaktree Specialty Lending 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.