Correlation Between Oaktree Specialty and Visa
Can any of the company-specific risk be diversified away by investing in both Oaktree Specialty and Visa 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 Visa 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 Visa Class A, you can compare the effects of market volatilities on Oaktree Specialty and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oaktree Specialty and Visa.
Diversification Opportunities for Oaktree Specialty and Visa
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oaktree and Visa is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Oaktree Specialty Lending and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Oaktree Specialty i.e., Oaktree Specialty and Visa go up and down completely randomly.
Pair Corralation between Oaktree Specialty and Visa
Given the investment horizon of 90 days Oaktree Specialty is expected to generate 5.82 times less return on investment than Visa. In addition to that, Oaktree Specialty is 1.33 times more volatile than Visa Class A. It trades about 0.03 of its total potential returns per unit of risk. Visa Class A is currently generating about 0.26 per unit of volatility. If you would invest 33,398 in Visa Class A on November 27, 2024 and sell it today you would earn a total of 1,455 from holding Visa Class A or generate 4.36% 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. Visa Class A
Performance |
| Timeline |
| Oaktree Specialty Lending |
| Visa Class A |
Oaktree Specialty and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oaktree Specialty and Visa
The main advantage of trading using opposite Oaktree Specialty and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oaktree Specialty position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| Oaktree Specialty vs. Barings BDC | Oaktree Specialty vs. OneMain Holdings | Oaktree Specialty vs. Runway Growth Finance | Oaktree Specialty vs. Ally Financial |
| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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