ECC, OCCI Or Neither Of Them: A Pairs Trade For 2 CEFs
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The article discusses a pair trade strategy involving two CLO CEFs: going long on ECC and short on OCCI. ECC, despite its larger size and historical outperformance, has high non-leverage expenses and lower asset yield. OCCI, while smaller, offers a higher asset yield but also has high non-leverage expenses and lacks historical alpha generation.
March 19, 2025 | 12:00 am
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OCCI is part of a pair trade strategy, being shorted due to its higher non-leverage expenses and lack of historical alpha generation, despite a higher asset yield.
OCCI is chosen for a short position in the pair trade due to its lack of historical alpha and high expenses, suggesting a negative short-term impact on its stock price.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
ECC is part of a pair trade strategy, being favored for a long position despite high non-leverage expenses and lower asset yield, due to its larger size and historical outperformance.
ECC is chosen for a long position in the pair trade due to its historical outperformance and larger size, which suggests a positive short-term impact on its stock price.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80