Correlation Between OFS Capital and Sixth Street
Can any of the company-specific risk be diversified away by investing in both OFS Capital and Sixth Street 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 Capital and Sixth Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFS Capital Corp and Sixth Street Specialty, you can compare the effects of market volatilities on OFS Capital and Sixth Street 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 Capital with a short position of Sixth Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFS Capital and Sixth Street.
Diversification Opportunities for OFS Capital and Sixth Street
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between OFS and Sixth is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding OFS Capital Corp and Sixth Street Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixth Street Specialty and OFS Capital 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 Capital Corp are associated (or correlated) with Sixth Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixth Street Specialty has no effect on the direction of OFS Capital i.e., OFS Capital and Sixth Street go up and down completely randomly.
Pair Corralation between OFS Capital and Sixth Street
Considering the 90-day investment horizon OFS Capital Corp is expected to under-perform the Sixth Street. But the stock apears to be less risky and, when comparing its historical volatility, OFS Capital Corp is 1.6 times less risky than Sixth Street. The stock trades about -0.03 of its potential returns per unit of risk. The Sixth Street Specialty is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,057 in Sixth Street Specialty on August 28, 2024 and sell it today you would earn a total of 37.00 from holding Sixth Street Specialty or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OFS Capital Corp vs. Sixth Street Specialty
Performance |
| Timeline |
| OFS Capital Corp |
| Sixth Street Specialty |
OFS Capital and Sixth Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFS Capital and Sixth Street
The main advantage of trading using opposite OFS Capital and Sixth Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFS Capital position performs unexpectedly, Sixth Street 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 Sixth Street will offset losses from the drop in Sixth Street's long position.| OFS Capital vs. Stellus Capital Investment | OFS Capital vs. Fidus Investment Corp | OFS Capital vs. Monroe Capital Corp | OFS Capital vs. New Mountain Finance |
| Sixth Street vs. New Mountain Finance | Sixth Street vs. Carlyle Secured Lending | Sixth Street vs. BlackRock TCP Capital | Sixth Street vs. Fidus Investment 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Positions Ratings 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 | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |