Correlation Between OFS Capital and Stellus Capital
Can any of the company-specific risk be diversified away by investing in both OFS Capital and Stellus 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 OFS Capital and Stellus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFS Capital Corp and Stellus Capital Investment, you can compare the effects of market volatilities on OFS Capital and Stellus 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 OFS Capital with a short position of Stellus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFS Capital and Stellus Capital.
Diversification Opportunities for OFS Capital and Stellus Capital
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OFS and Stellus is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding OFS Capital Corp and Stellus Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellus Capital Inve and OFS Capital 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 OFS Capital Corp are associated (or correlated) with Stellus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellus Capital Inve has no effect on the direction of OFS Capital i.e., OFS Capital and Stellus Capital go up and down completely randomly.
Pair Corralation between OFS Capital and Stellus Capital
Considering the 90-day investment horizon OFS Capital is expected to generate 2.73 times less return on investment than Stellus Capital. In addition to that, OFS Capital is 1.43 times more volatile than Stellus Capital Investment. It trades about 0.1 of its total potential returns per unit of risk. Stellus Capital Investment is currently generating about 0.38 per unit of volatility. If you would invest 1,365 in Stellus Capital Investment on December 2, 2024 and sell it today you would earn a total of 162.00 from holding Stellus Capital Investment or generate 11.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
OFS Capital Corp vs. Stellus Capital Investment
Performance |
Timeline |
OFS Capital Corp |
Stellus Capital Inve |
OFS Capital and Stellus Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OFS Capital and Stellus Capital
The main advantage of trading using opposite OFS Capital and Stellus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFS Capital position performs unexpectedly, Stellus 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 Stellus Capital will offset losses from the drop in Stellus Capital's long position.OFS Capital vs. Stellus Capital Investment | OFS Capital vs. Fidus Investment Corp | OFS Capital vs. Monroe Capital Corp | OFS Capital vs. New Mountain Finance |
Stellus Capital vs. PennantPark Floating Rate | Stellus Capital vs. Gladstone Capital | Stellus Capital vs. Gladstone Investment | Stellus Capital vs. Prospect Capital |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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