Correlation Between Blue Owl and Listed Funds

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

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

Diversification Opportunities for Blue Owl and Listed Funds

-0.13

Correlation Coefficient

Blue Owl  Listed Funds

Good diversification

The 3 months correlation between Blue and Listed is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Blue Owl Capital and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust and Blue Owl 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 Blue Owl Capital are associated (or correlated) with Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Blue Owl i.e., Blue Owl and Listed Funds go up and down completely randomly.

Pair Corralation between Blue Owl and Listed Funds

Considering the 90-day investment horizon Blue Owl Capital is expected to generate 3.39 times more return on investment than Listed Funds. However, Blue Owl is 3.39 times more volatile than Listed Funds Trust. It trades about 0.25 of its potential returns per unit of risk. Listed Funds Trust is currently generating about -0.07 per unit of risk. If you would invest  1,651  in Blue Owl Capital on September 4, 2024 and sell it today you would earn a total of  653.00  from holding Blue Owl Capital or generate 39.55% return on investment over 90 days.

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

Blue Owl Capital  vs.  Listed Funds Trust

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.

Listed Funds Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Listed Funds Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Listed Funds is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Blue Owl and Listed Funds

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

The idea behind Blue Owl Capital and Listed Funds Trust 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.