Correlation Between Oaktree Specialty and Carlyle Secured

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

By analyzing existing cross correlation between Oaktree Specialty Lending and Carlyle Secured Lending, you can compare the effects of market volatilities on Oaktree Specialty and Carlyle Secured 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 Oaktree Specialty with a short position of Carlyle Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oaktree Specialty and Carlyle Secured.

Diversification Opportunities for Oaktree Specialty and Carlyle Secured

-0.1

Correlation Coefficient

Oaktree Specialty  Carlyle Secured

Good diversification

The 3 months correlation between Oaktree and Carlyle is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Specialty Lending and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending and Oaktree Specialty 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 Oaktree Specialty Lending are associated (or correlated) with Carlyle Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of Oaktree Specialty i.e., Oaktree Specialty and Carlyle Secured go up and down completely randomly.

Pair Corralation between Oaktree Specialty and Carlyle Secured

Given the investment horizon of 90 days Oaktree Specialty Lending is expected to under-perform the Carlyle Secured. In addition to that, Oaktree Specialty is 1.03 times more volatile than Carlyle Secured Lending. It trades about -0.06 of its total potential returns per unit of risk. Carlyle Secured Lending is currently generating about 0.11 per unit of volatility. If you would invest  1,389  in Carlyle Secured Lending on October 23, 2024 and sell it today you would earn a total of  457.00  from holding Carlyle Secured Lending or generate 32.9% return on investment over 90 days.

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

Oaktree Specialty Lending  vs.  Carlyle Secured Lending

Oaktree Specialty Lending

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oaktree Specialty Lending are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Carlyle Secured Lending

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 12 (%) 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.

Pair Trading with Oaktree Specialty and Carlyle Secured

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

The idea behind Oaktree Specialty Lending and Carlyle Secured 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.