Correlation Between Great Elm and Oaktree Capital
Can any of the company-specific risk be diversified away by investing in both Great Elm 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 Great Elm and Oaktree Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Elm Capital and Oaktree Capital Group, you can compare the effects of market volatilities on Great Elm 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 Great Elm with a short position of Oaktree Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and Oaktree Capital.
Diversification Opportunities for Great Elm and Oaktree Capital
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great and Oaktree is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital 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 Great Elm 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 Great Elm Capital 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 Great Elm i.e., Great Elm and Oaktree Capital go up and down completely randomly.
Pair Corralation between Great Elm and Oaktree Capital
Assuming the 90 days horizon Great Elm Capital is expected to generate 0.56 times more return on investment than Oaktree Capital. However, Great Elm Capital is 1.79 times less risky than Oaktree Capital. It trades about 0.05 of its potential returns per unit of risk. Oaktree Capital Group is currently generating about 0.02 per unit of risk. If you would invest 2,126 in Great Elm Capital on October 20, 2024 and sell it today you would earn a total of 345.00 from holding Great Elm Capital or generate 16.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Elm Capital vs. Oaktree Capital Group
Performance |
| Timeline |
| Great Elm Capital |
| Oaktree Capital Group |
Great Elm and Oaktree Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Elm and Oaktree Capital
The main advantage of trading using opposite Great Elm and Oaktree Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm 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 Great Elm Capital 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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