Correlation Between Ford and Oaktree Capital
Can any of the company-specific risk be diversified away by investing in both Ford and Oaktree 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 Ford and Oaktree Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Oaktree Capital Group, you can compare the effects of market volatilities on Ford and Oaktree 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 Ford with a short position of Oaktree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Oaktree Capital.
Diversification Opportunities for Ford and Oaktree Capital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ford and Oaktree is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Oaktree Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Capital Group and Ford 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 Ford Motor are associated (or correlated) with Oaktree Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Capital Group has no effect on the direction of Ford i.e., Ford and Oaktree Capital go up and down completely randomly.
Pair Corralation between Ford and Oaktree Capital
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Oaktree Capital. In addition to that, Ford is 1.77 times more volatile than Oaktree Capital Group. It trades about 0.0 of its total potential returns per unit of risk. Oaktree Capital Group is currently generating about 0.02 per unit of volatility. If you would invest 1,994 in Oaktree Capital Group on November 9, 2024 and sell it today you would earn a total of 205.00 from holding Oaktree Capital Group or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Oaktree Capital Group
Performance |
| Timeline |
| Ford Motor |
| Oaktree Capital Group |
Ford and Oaktree Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Oaktree Capital
The main advantage of trading using opposite Ford and Oaktree Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Oaktree 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 Oaktree Capital will offset losses from the drop in Oaktree Capital's long position.The idea behind Ford Motor and Oaktree Capital Group 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.| Oaktree Capital vs. The Gabelli Multimedia | Oaktree Capital vs. The Gabelli Equity | Oaktree Capital vs. Virtus AllianzGI Convertible | Oaktree Capital vs. Tri Continental PFD |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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