Correlation Between Affiliated Managers and Blue Owl

Can any of the company-specific risk be diversified away by investing in both Affiliated Managers and Blue Owl 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 Affiliated Managers and Blue Owl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Affiliated Managers Group and Blue Owl Capital, you can compare the effects of market volatilities on Affiliated Managers and Blue Owl 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 Affiliated Managers with a short position of Blue Owl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Managers and Blue Owl.

Diversification Opportunities for Affiliated Managers and Blue Owl

0.89

Correlation Coefficient

Affiliated Managers  Blue Owl

Very poor diversification

The 3 months correlation between Affiliated and Blue is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Managers Group and Blue Owl Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Owl Capital and Affiliated Managers 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 Affiliated Managers Group are associated (or correlated) with Blue Owl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Owl Capital has no effect on the direction of Affiliated Managers i.e., Affiliated Managers and Blue Owl go up and down completely randomly.

Pair Corralation between Affiliated Managers and Blue Owl

Considering the 90-day investment horizon Affiliated Managers is expected to generate 2.34 times less return on investment than Blue Owl. But when comparing it to its historical volatility, Affiliated Managers Group is 1.94 times less risky than Blue Owl. It trades about 0.22 of its potential returns per unit of risk. Blue Owl Capital is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  2,080  in Blue Owl Capital on September 3, 2024 and sell it today you would earn a total of  293.00  from holding Blue Owl Capital or generate 14.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Affiliated Managers Group  vs.  Blue Owl Capital

Affiliated Managers

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Managers Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating primary indicators, Affiliated Managers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Blue Owl Capital

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Owl Capital are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Blue Owl disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Affiliated Managers and Blue Owl

The main advantage of trading using opposite Affiliated Managers and Blue Owl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Managers position performs unexpectedly, Blue Owl 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 Blue Owl will offset losses from the drop in Blue Owl's long position.

The idea behind Affiliated Managers Group and Blue Owl 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.