Correlation Between Oaktree Capital and Kayne Anderson
Can any of the company-specific risk be diversified away by investing in both Oaktree Capital and Kayne Anderson 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 Kayne Anderson 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 Kayne Anderson MLP, you can compare the effects of market volatilities on Oaktree Capital and Kayne Anderson 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 Kayne Anderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oaktree Capital and Kayne Anderson.
Diversification Opportunities for Oaktree Capital and Kayne Anderson
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oaktree and Kayne is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Capital Group and Kayne Anderson MLP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson MLP 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 Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson MLP has no effect on the direction of Oaktree Capital i.e., Oaktree Capital and Kayne Anderson go up and down completely randomly.
Pair Corralation between Oaktree Capital and Kayne Anderson
Assuming the 90 days trading horizon Oaktree Capital Group is expected to under-perform the Kayne Anderson. But the preferred stock apears to be less risky and, when comparing its historical volatility, Oaktree Capital Group is 1.48 times less risky than Kayne Anderson. The preferred stock trades about -0.13 of its potential returns per unit of risk. The Kayne Anderson MLP is currently generating about 0.63 of returns per unit of risk over similar time horizon. If you would invest 1,142 in Kayne Anderson MLP on September 1, 2024 and sell it today you would earn a total of 209.00 from holding Kayne Anderson MLP or generate 18.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oaktree Capital Group vs. Kayne Anderson MLP
Performance |
| Timeline |
| Oaktree Capital Group |
| Kayne Anderson MLP |
Oaktree Capital and Kayne Anderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oaktree Capital and Kayne Anderson
The main advantage of trading using opposite Oaktree Capital and Kayne Anderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oaktree Capital position performs unexpectedly, Kayne Anderson 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 Kayne Anderson will offset losses from the drop in Kayne Anderson'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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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