Correlation Between Sp Smallcap and Oaktree (lux)

Can any of the company-specific risk be diversified away by investing in both Sp Smallcap and Oaktree (lux) 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 Sp Smallcap and Oaktree (lux) into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sp Smallcap 600 and Oaktree Iii , you can compare the effects of market volatilities on Sp Smallcap and Oaktree (lux) 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 Sp Smallcap with a short position of Oaktree (lux). Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Oaktree (lux).

Diversification Opportunities for Sp Smallcap and Oaktree (lux)

-0.63

Correlation Coefficient

Sp Smallcap  Oaktree (lux)

Excellent diversification

The 3 months correlation between RYSVX and Oaktree is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 and Oaktree Iii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree (lux) and Sp Smallcap 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 Sp Smallcap 600 are associated (or correlated) with Oaktree (lux). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree (lux) has no effect on the direction of Sp Smallcap i.e., Sp Smallcap and Oaktree (lux) go up and down completely randomly.

Pair Corralation between Sp Smallcap and Oaktree (lux)

Assuming the 90 days horizon Sp Smallcap 600 is expected to generate 20.76 times more return on investment than Oaktree (lux). However, Sp Smallcap is 20.76 times more volatile than Oaktree Iii . It trades about 0.06 of its potential returns per unit of risk. Oaktree Iii is currently generating about 0.47 per unit of risk. If you would invest  20,232  in Sp Smallcap 600 on October 26, 2024 and sell it today you would earn a total of  907.00  from holding Sp Smallcap 600 or generate 4.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	81.36%
Values	Daily Returns

Sp Smallcap 600  vs.  Oaktree Iii

Sp Smallcap 600

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sp Smallcap 600 are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Sp Smallcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oaktree (lux)

Risk-Adjusted Performance

37 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Oaktree Iii are ranked lower than 37 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Oaktree (lux) is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sp Smallcap and Oaktree (lux)

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

The idea behind Sp Smallcap 600 and Oaktree Iii 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.