Correlation Between Oaktree Diversifiedome and Sterling Capital

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

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

Diversification Opportunities for Oaktree Diversifiedome and Sterling Capital

-0.66

Correlation Coefficient

Oaktree Diversifiedome  Sterling Capital

Excellent diversification

The 3 months correlation between Oaktree and Sterling is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Diversifiedome and Sterling Capital Securitized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Sec and Oaktree Diversifiedome 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 Diversifiedome are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Sec has no effect on the direction of Oaktree Diversifiedome i.e., Oaktree Diversifiedome and Sterling Capital go up and down completely randomly.

Pair Corralation between Oaktree Diversifiedome and Sterling Capital

Assuming the 90 days horizon Oaktree Diversifiedome is expected to generate 0.28 times more return on investment than Sterling Capital. However, Oaktree Diversifiedome is 3.64 times less risky than Sterling Capital. It trades about 0.49 of its potential returns per unit of risk. Sterling Capital Securitized is currently generating about -0.17 per unit of risk. If you would invest  909.00  in Oaktree Diversifiedome on September 17, 2024 and sell it today you would earn a total of  22.00  from holding Oaktree Diversifiedome or generate 2.42% return on investment over 90 days.

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

Oaktree Diversifiedome  vs.  Sterling Capital Securitized

Oaktree Diversifiedome

Risk-Adjusted Performance

38 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Oaktree Diversifiedome are ranked lower than 38 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Oaktree Diversifiedome is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sterling Capital Sec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sterling Capital Securitized has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Sterling Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oaktree Diversifiedome and Sterling Capital

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

The idea behind Oaktree Diversifiedome and Sterling Capital Securitized 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.