Correlation Between Verizon Communications and Oaktree (lux)

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

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

Diversification Opportunities for Verizon Communications and Oaktree (lux)

0.79

Correlation Coefficient

Verizon Communications  Oaktree (lux)

Poor diversification

The 3 months correlation between Verizon and Oaktree is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and Oaktree Iii in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree (lux) and Verizon Communications 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 Verizon Communications 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 Verizon Communications i.e., Verizon Communications and Oaktree (lux) go up and down completely randomly.

Pair Corralation between Verizon Communications and Oaktree (lux)

Allowing for the 90-day total investment horizon Verizon Communications is expected to generate 16.93 times more return on investment than Oaktree (lux). However, Verizon Communications is 16.93 times more volatile than Oaktree Iii . It trades about 0.13 of its potential returns per unit of risk. Oaktree Iii is currently generating about 0.28 per unit of risk. If you would invest  3,922  in Verizon Communications on December 23, 2024 and sell it today you would earn a total of  477.00  from holding Verizon Communications or generate 12.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Verizon Communications  vs.  Oaktree Iii

Verizon Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Verizon Communications are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Verizon Communications may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Oaktree (lux)

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oaktree Iii are ranked lower than 21 (%) 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 Verizon Communications and Oaktree (lux)

The main advantage of trading using opposite Verizon Communications and Oaktree (lux) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications 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 Verizon Communications 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.