Correlation Between Equus Total and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Equus Total 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 Equus Total and OFS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equus Total Return and OFS Credit, you can compare the effects of market volatilities on Equus Total 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 Equus Total with a short position of OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equus Total and OFS Credit.
Diversification Opportunities for Equus Total and OFS Credit
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Equus and OFS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Equus Total Return and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit and Equus Total 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 Equus Total Return 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 Equus Total i.e., Equus Total and OFS Credit go up and down completely randomly.
Pair Corralation between Equus Total and OFS Credit
Considering the 90-day investment horizon Equus Total Return is expected to generate 8.72 times more return on investment than OFS Credit. However, Equus Total is 8.72 times more volatile than OFS Credit. It trades about 0.11 of its potential returns per unit of risk. OFS Credit is currently generating about 0.04 per unit of risk. If you would invest 125.00 in Equus Total Return on November 28, 2024 and sell it today you would earn a total of 10.00 from holding Equus Total Return or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Equus Total Return vs. OFS Credit
Performance |
| Timeline |
| Equus Total Return |
| OFS Credit |
Equus Total and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equus Total and OFS Credit
The main advantage of trading using opposite Equus Total and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equus Total 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.| Equus Total vs. Rand Capital Corp | Equus Total vs. Gabelli Convertible And | Equus Total vs. Mfs Intermediate High | Equus Total vs. RENN Fund |
| OFS Credit vs. Oxford Lane Capital | OFS Credit vs. OFS Credit | OFS Credit vs. XOMA Corporation | OFS Credit vs. Oxford Lane 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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