Correlation Between Sixth Street and Oaktree Specialty
Can any of the company-specific risk be diversified away by investing in both Sixth Street and Oaktree Specialty 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 Sixth Street and Oaktree Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixth Street Specialty and Oaktree Specialty Lending, you can compare the effects of market volatilities on Sixth Street and Oaktree Specialty 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 Sixth Street with a short position of Oaktree Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixth Street and Oaktree Specialty.
Diversification Opportunities for Sixth Street and Oaktree Specialty
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sixth and Oaktree is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sixth Street Specialty and Oaktree Specialty Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oaktree Specialty Lending and Sixth Street 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 Sixth Street Specialty are associated (or correlated) with Oaktree Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oaktree Specialty Lending has no effect on the direction of Sixth Street i.e., Sixth Street and Oaktree Specialty go up and down completely randomly.
Pair Corralation between Sixth Street and Oaktree Specialty
Given the investment horizon of 90 days Sixth Street Specialty is expected to generate 0.7 times more return on investment than Oaktree Specialty. However, Sixth Street Specialty is 1.44 times less risky than Oaktree Specialty. It trades about 0.03 of its potential returns per unit of risk. Oaktree Specialty Lending is currently generating about -0.08 per unit of risk. If you would invest 2,094 in Sixth Street Specialty on September 1, 2024 and sell it today you would earn a total of 54.00 from holding Sixth Street Specialty or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixth Street Specialty vs. Oaktree Specialty Lending
Performance |
| Timeline |
| Sixth Street Specialty |
| Oaktree Specialty Lending |
Sixth Street and Oaktree Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixth Street and Oaktree Specialty
The main advantage of trading using opposite Sixth Street and Oaktree Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixth Street position performs unexpectedly, Oaktree Specialty 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 Oaktree Specialty will offset losses from the drop in Oaktree Specialty's long position.| Sixth Street vs. Visa Class A | Sixth Street vs. Diamond Hill Investment | Sixth Street vs. Distoken Acquisition | Sixth Street vs. Associated Capital Group |
| Oaktree Specialty vs. Barings BDC | Oaktree Specialty vs. OneMain Holdings | Oaktree Specialty vs. Runway Growth Finance | Oaktree Specialty vs. Ally 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 CEOs Directory module to screen CEOs from public companies around the world.
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