Correlation Between Green Dot and Oaktree Specialty
Can any of the company-specific risk be diversified away by investing in both Green Dot and Oaktree Specialty 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 Green Dot and Oaktree Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Dot and Oaktree Specialty Lending, you can compare the effects of market volatilities on Green Dot and Oaktree Specialty 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 Green Dot with a short position of Oaktree Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Dot and Oaktree Specialty.
Diversification Opportunities for Green Dot and Oaktree Specialty
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Green and Oaktree is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Green Dot and Oaktree Specialty Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Specialty Lending and Green Dot 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 Green Dot are associated (or correlated) with Oaktree Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Specialty Lending has no effect on the direction of Green Dot i.e., Green Dot and Oaktree Specialty go up and down completely randomly.
Pair Corralation between Green Dot and Oaktree Specialty
Given the investment horizon of 90 days Green Dot is expected to under-perform the Oaktree Specialty. In addition to that, Green Dot is 4.11 times more volatile than Oaktree Specialty Lending. It trades about -0.09 of its total potential returns per unit of risk. Oaktree Specialty Lending is currently generating about 0.02 per unit of volatility. If you would invest 1,620 in Oaktree Specialty Lending on August 30, 2024 and sell it today you would earn a total of 8.00 from holding Oaktree Specialty Lending or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Dot vs. Oaktree Specialty Lending
Performance |
| Timeline |
| Green Dot |
| Oaktree Specialty Lending |
Green Dot and Oaktree Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Dot and Oaktree Specialty
The main advantage of trading using opposite Green Dot and Oaktree Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Dot position performs unexpectedly, Oaktree Specialty 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 Specialty will offset losses from the drop in Oaktree Specialty's long position.| Green Dot vs. Guidewire Software | Green Dot vs. Envestnet | Green Dot vs. Evertec | Green Dot vs. Axos Financial |
| Oaktree Specialty vs. Barings BDC | Oaktree Specialty vs. OneMain Holdings | Oaktree Specialty vs. Runway Growth Finance | Oaktree Specialty vs. Ally Financial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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