Correlation Between Sixth Street and Owl Rock
Can any of the company-specific risk be diversified away by investing in both Sixth Street and Owl Rock 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 Owl Rock 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 Owl Rock Capital, you can compare the effects of market volatilities on Sixth Street and Owl Rock 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 Owl Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixth Street and Owl Rock.
Diversification Opportunities for Sixth Street and Owl Rock
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sixth and Owl is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sixth Street Specialty and Owl Rock Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owl Rock Capital 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 Owl Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owl Rock Capital has no effect on the direction of Sixth Street i.e., Sixth Street and Owl Rock go up and down completely randomly.
Pair Corralation between Sixth Street and Owl Rock
If you would invest 2,057 in Sixth Street Specialty on August 29, 2024 and sell it today you would earn a total of 62.00 from holding Sixth Street Specialty or generate 3.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Sixth Street Specialty vs. Owl Rock Capital
Performance |
| Timeline |
| Sixth Street Specialty |
| Owl Rock Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sixth Street and Owl Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixth Street and Owl Rock
The main advantage of trading using opposite Sixth Street and Owl Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixth Street position performs unexpectedly, Owl Rock 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 Owl Rock will offset losses from the drop in Owl Rock's long position.The idea behind Sixth Street Specialty and Owl Rock Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Owl Rock vs. Barings BDC | Owl Rock vs. Runway Growth Finance | Owl Rock vs. OneMain Holdings | Owl Rock vs. Navient 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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