Correlation Between Owl Rock and Consumer Portfolio

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

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

Diversification Opportunities for Owl Rock and Consumer Portfolio

0.71

Correlation Coefficient

Owl Rock  Consumer Portfolio

Poor diversification

The 3 months correlation between Owl and Consumer is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Owl Rock Capital and Consumer Portfolio Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Portfolio and Owl Rock 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 Owl Rock Capital are associated (or correlated) with Consumer Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Portfolio has no effect on the direction of Owl Rock i.e., Owl Rock and Consumer Portfolio go up and down completely randomly.

Pair Corralation between Owl Rock and Consumer Portfolio

If you would invest  1,036  in Consumer Portfolio Services on September 27, 2024 and sell it today you would earn a total of  28.00  from holding Consumer Portfolio Services or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.55%
Values	Daily Returns

Owl Rock Capital  vs.  Consumer Portfolio Services

Owl Rock Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Owl Rock Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Owl Rock is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Consumer Portfolio

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Consumer Portfolio Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Consumer Portfolio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Owl Rock and Consumer Portfolio

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

The idea behind Owl Rock Capital and Consumer Portfolio Services 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.