Correlation Between Oxford Square and Sixth Street
Can any of the company-specific risk be diversified away by investing in both Oxford Square 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 Oxford Square and Sixth Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Square Capital and Sixth Street Specialty, you can compare the effects of market volatilities on Oxford Square 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 Oxford Square with a short position of Sixth Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Square and Sixth Street.
Diversification Opportunities for Oxford Square and Sixth Street
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oxford and Sixth is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Square Capital 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 Oxford Square 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 Oxford Square Capital 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 Oxford Square i.e., Oxford Square and Sixth Street go up and down completely randomly.
Pair Corralation between Oxford Square and Sixth Street
Given the investment horizon of 90 days Oxford Square Capital is expected to under-perform the Sixth Street. In addition to that, Oxford Square is 1.16 times more volatile than Sixth Street Specialty. It trades about -0.32 of its total potential returns per unit of risk. Sixth Street Specialty is currently generating about 0.09 per unit of volatility. If you would invest 2,057 in Sixth Street Specialty on August 29, 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 Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Oxford Square Capital vs. Sixth Street Specialty
Performance |
| Timeline |
| Oxford Square Capital |
| Sixth Street Specialty |
Oxford Square and Sixth Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Square and Sixth Street
The main advantage of trading using opposite Oxford Square and Sixth Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Square 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.| Oxford Square vs. Eagle Point Credit | Oxford Square vs. Cornerstone Strategic Return | Oxford Square vs. Cornerstone Strategic Value | Oxford Square vs. Guggenheim Strategic Opportunities |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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