Correlation Between OFS Credit and Affiliated Managers
Can any of the company-specific risk be diversified away by investing in both OFS Credit and Affiliated Managers 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 OFS Credit and Affiliated Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFS Credit and Affiliated Managers Group, you can compare the effects of market volatilities on OFS Credit and Affiliated Managers 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 OFS Credit with a short position of Affiliated Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFS Credit and Affiliated Managers.
Diversification Opportunities for OFS Credit and Affiliated Managers
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OFS and Affiliated is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding OFS Credit and Affiliated Managers Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affiliated Managers and OFS Credit 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 OFS Credit are associated (or correlated) with Affiliated Managers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affiliated Managers has no effect on the direction of OFS Credit i.e., OFS Credit and Affiliated Managers go up and down completely randomly.
Pair Corralation between OFS Credit and Affiliated Managers
Assuming the 90 days horizon OFS Credit is expected to generate 0.18 times more return on investment than Affiliated Managers. However, OFS Credit is 5.52 times less risky than Affiliated Managers. It trades about 0.05 of its potential returns per unit of risk. Affiliated Managers Group is currently generating about -0.07 per unit of risk. If you would invest 2,467 in OFS Credit on August 31, 2024 and sell it today you would earn a total of 11.00 from holding OFS Credit or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFS Credit vs. Affiliated Managers Group
Performance |
| Timeline |
| OFS Credit |
| Affiliated Managers |
OFS Credit and Affiliated Managers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFS Credit and Affiliated Managers
The main advantage of trading using opposite OFS Credit and Affiliated Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFS Credit position performs unexpectedly, Affiliated Managers 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 Affiliated Managers will offset losses from the drop in Affiliated Managers' long position.| OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Utility | OFS Credit vs. Bancroft Fund |
| Affiliated Managers vs. Brightsphere Investment Group | Affiliated Managers vs. Franklin Templeton Limited | Affiliated Managers vs. Blackrock Muni Intermediate | Affiliated Managers vs. Munivest Fund |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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