Correlation Between Oaktree Specialty and Mastercard
Can any of the company-specific risk be diversified away by investing in both Oaktree Specialty and Mastercard 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 Mastercard 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 Mastercard, you can compare the effects of market volatilities on Oaktree Specialty and Mastercard 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 Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oaktree Specialty and Mastercard.
Diversification Opportunities for Oaktree Specialty and Mastercard
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oaktree and Mastercard is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Specialty Lending and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard 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 Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Oaktree Specialty i.e., Oaktree Specialty and Mastercard go up and down completely randomly.
Pair Corralation between Oaktree Specialty and Mastercard
Given the investment horizon of 90 days Oaktree Specialty is expected to generate 4.8 times less return on investment than Mastercard. In addition to that, Oaktree Specialty is 1.02 times more volatile than Mastercard. It trades about 0.02 of its total potential returns per unit of risk. Mastercard is currently generating about 0.1 per unit of volatility. If you would invest 35,650 in Mastercard on November 27, 2024 and sell it today you would earn a total of 20,101 from holding Mastercard or generate 56.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oaktree Specialty Lending vs. Mastercard
Performance |
| Timeline |
| Oaktree Specialty Lending |
| Mastercard |
Oaktree Specialty and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oaktree Specialty and Mastercard
The main advantage of trading using opposite Oaktree Specialty and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oaktree Specialty position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.| Oaktree Specialty vs. Barings BDC | Oaktree Specialty vs. OneMain Holdings | Oaktree Specialty vs. Runway Growth Finance | Oaktree Specialty vs. Ally Financial |
| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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