Correlation Between Oaktree Capital and Bank of AmericaPFD SER B
Can any of the company-specific risk be diversified away by investing in both Oaktree Capital and Bank of AmericaPFD SER B 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 Oaktree Capital and Bank of AmericaPFD SER B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oaktree Capital Group and Bank of America, you can compare the effects of market volatilities on Oaktree Capital and Bank of AmericaPFD SER B 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 Oaktree Capital with a short position of Bank of AmericaPFD SER B . Check out your portfolio center. Please also check ongoing floating volatility patterns of Oaktree Capital and Bank of AmericaPFD SER B .
Diversification Opportunities for Oaktree Capital and Bank of AmericaPFD SER B
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oaktree and Bank is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Capital Group and Bank of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of AmericaPFD SER B and Oaktree Capital 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 Oaktree Capital Group are associated (or correlated) with Bank of AmericaPFD SER B . Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of AmericaPFD SER B has no effect on the direction of Oaktree Capital i.e., Oaktree Capital and Bank of AmericaPFD SER B go up and down completely randomly.
Pair Corralation between Oaktree Capital and Bank of AmericaPFD SER B
Assuming the 90 days trading horizon Oaktree Capital Group is expected to under-perform the Bank of AmericaPFD SER B . But the preferred stock apears to be less risky and, when comparing its historical volatility, Oaktree Capital Group is 27.18 times less risky than Bank of AmericaPFD SER B . The preferred stock trades about -0.03 of its potential returns per unit of risk. The Bank of America is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 20,000 in Bank of America on November 27, 2024 and sell it today you would earn a total of 5,999 from holding Bank of America or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oaktree Capital Group vs. Bank of America
Performance |
| Timeline |
| Oaktree Capital Group |
| Bank of AmericaPFD SER B |
Oaktree Capital and Bank of AmericaPFD SER B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oaktree Capital and Bank of AmericaPFD SER B
The main advantage of trading using opposite Oaktree Capital and Bank of AmericaPFD SER B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oaktree Capital position performs unexpectedly, Bank of AmericaPFD SER B 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 Bank of AmericaPFD SER B will offset losses from the drop in Bank of AmericaPFD SER B 's long position.| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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