Correlation Between Oaktree Specialty and Navient Corp
Can any of the company-specific risk be diversified away by investing in both Oaktree Specialty and Navient 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 Navient 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 Navient Corp, you can compare the effects of market volatilities on Oaktree Specialty and Navient 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 Navient Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oaktree Specialty and Navient Corp.
Diversification Opportunities for Oaktree Specialty and Navient Corp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oaktree and Navient is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Specialty Lending and Navient Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navient Corp 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 Navient Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navient Corp has no effect on the direction of Oaktree Specialty i.e., Oaktree Specialty and Navient Corp go up and down completely randomly.
Pair Corralation between Oaktree Specialty and Navient Corp
Given the investment horizon of 90 days Oaktree Specialty Lending is expected to under-perform the Navient Corp. But the stock apears to be less risky and, when comparing its historical volatility, Oaktree Specialty Lending is 2.26 times less risky than Navient Corp. The stock trades about 0.0 of its potential returns per unit of risk. The Navient Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Navient Corp on August 26, 2024 and sell it today you would earn a total of 37.00 from holding Navient Corp or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oaktree Specialty Lending vs. Navient Corp
Performance |
| Timeline |
| Oaktree Specialty Lending |
| Navient Corp |
Oaktree Specialty and Navient Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oaktree Specialty and Navient Corp
The main advantage of trading using opposite Oaktree Specialty and Navient Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oaktree Specialty position performs unexpectedly, Navient 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 Navient Corp will offset losses from the drop in Navient 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 |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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