Correlation Between Alphabet and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and OFS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Inc Class C and OFS Credit, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and OFS Credit.
Diversification Opportunities for Alphabet and OFS Credit
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alphabet and OFS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit and Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and OFS Credit go up and down completely randomly.
Pair Corralation between Alphabet and OFS Credit
Given the investment horizon of 90 days Alphabet Inc Class C is expected to generate 1.13 times more return on investment than OFS Credit. However, Alphabet is 1.13 times more volatile than OFS Credit. It trades about 0.07 of its potential returns per unit of risk. OFS Credit is currently generating about 0.03 per unit of risk. If you would invest 9,963 in Alphabet Inc Class C on August 24, 2024 and sell it today you would earn a total of 6,694 from holding Alphabet Inc Class C or generate 67.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphabet Inc Class C vs. OFS Credit
Performance |
| Timeline |
| Alphabet Class C |
| OFS Credit |
Alphabet and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphabet and OFS Credit
The main advantage of trading using opposite Alphabet and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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.The idea behind Alphabet Inc Class C and OFS Credit 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.| OFS Credit vs. WhiteHorse Finance | OFS Credit vs. Monroe Capital Corp | OFS Credit vs. Portman Ridge Finance | OFS Credit vs. Fidus Investment Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |