Correlation Between Oaktree Specialty and Orix Corp
Can any of the company-specific risk be diversified away by investing in both Oaktree Specialty and Orix Corp 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 Specialty and Orix Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oaktree Specialty Lending and Orix Corp Ads, you can compare the effects of market volatilities on Oaktree Specialty and Orix Corp 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 Specialty with a short position of Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oaktree Specialty and Orix Corp.
Diversification Opportunities for Oaktree Specialty and Orix Corp
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Oaktree and Orix is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Specialty Lending and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads and Oaktree Specialty 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 Specialty Lending are associated (or correlated) with Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of Oaktree Specialty i.e., Oaktree Specialty and Orix Corp go up and down completely randomly.
Pair Corralation between Oaktree Specialty and Orix Corp
Given the investment horizon of 90 days Oaktree Specialty is expected to generate 1.87 times less return on investment than Orix Corp. But when comparing it to its historical volatility, Oaktree Specialty Lending is 1.03 times less risky than Orix Corp. It trades about 0.02 of its potential returns per unit of risk. Orix Corp Ads is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,682 in Orix Corp Ads on August 30, 2024 and sell it today you would earn a total of 114.00 from holding Orix Corp Ads or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oaktree Specialty Lending vs. Orix Corp Ads
Performance |
| Timeline |
| Oaktree Specialty Lending |
| Orix Corp Ads |
Oaktree Specialty and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oaktree Specialty and Orix Corp
The main advantage of trading using opposite Oaktree Specialty and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oaktree Specialty position performs unexpectedly, Orix Corp 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 Orix Corp will offset losses from the drop in Orix Corp's long position.| Oaktree Specialty vs. Barings BDC | Oaktree Specialty vs. OneMain Holdings | Oaktree Specialty vs. Runway Growth Finance | Oaktree Specialty vs. Ally Financial |
| Orix Corp vs. Atlanticus Holdings Corp | Orix Corp vs. Nelnet Inc | Orix Corp vs. EZCORP Inc | Orix Corp vs. SLM 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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