Correlation Between Affiliated Managers and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Affiliated Managers and OFS Credit 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 Affiliated Managers and OFS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Managers Group and OFS Credit, you can compare the effects of market volatilities on Affiliated Managers and OFS Credit 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 Affiliated Managers with a short position of OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and OFS Credit.
Diversification Opportunities for Affiliated Managers and OFS Credit
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Affiliated and OFS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit and Affiliated Managers 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 Affiliated Managers Group are associated (or correlated) with OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and OFS Credit go up and down completely randomly.
Pair Corralation between Affiliated Managers and OFS Credit
Considering the 90-day investment horizon Affiliated Managers Group is expected to under-perform the OFS Credit. In addition to that, Affiliated Managers is 6.01 times more volatile than OFS Credit. It trades about -0.07 of its total potential returns per unit of risk. OFS Credit is currently generating about 0.07 per unit of volatility. If you would invest 2,361 in OFS Credit on August 31, 2024 and sell it today you would earn a total of 14.00 from holding OFS Credit or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Affiliated Managers Group vs. OFS Credit
Performance |
| Timeline |
| Affiliated Managers |
| OFS Credit |
Affiliated Managers and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Managers and OFS Credit
The main advantage of trading using opposite Affiliated Managers and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers position performs unexpectedly, OFS Credit 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 OFS Credit will offset losses from the drop in OFS Credit's long position.| Affiliated Managers vs. Brightsphere Investment Group | Affiliated Managers vs. Franklin Templeton Limited | Affiliated Managers vs. Blackrock Muni Intermediate | Affiliated Managers vs. Munivest Fund |
| OFS Credit vs. OFS Credit | OFS Credit vs. Oxford Lane Capital | OFS Credit vs. Gladstone Land Corp | OFS Credit vs. Eagle Point Income |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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