Correlation Between Broad Capital and Oxford Lane

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Can any of the company-specific risk be diversified away by investing in both Broad Capital and Oxford Lane 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 Broad Capital and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broad Capital Acquisition and Oxford Lane Capital, you can compare the effects of market volatilities on Broad Capital and Oxford Lane 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 Broad Capital with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and Oxford Lane.

Diversification Opportunities for Broad Capital and Oxford Lane

BroadOxfordDiversified AwayBroadOxfordDiversified Away100%
-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Broad and Oxford is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and Oxford Lane Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Lane Capital and Broad Capital 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 Broad Capital Acquisition are associated (or correlated) with Oxford Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Lane Capital has no effect on the direction of Broad Capital i.e., Broad Capital and Oxford Lane go up and down completely randomly.

Pair Corralation between Broad Capital and Oxford Lane

Assuming the 90 days horizon Broad Capital Acquisition is expected to under-perform the Oxford Lane. In addition to that, Broad Capital is 1.06 times more volatile than Oxford Lane Capital. It trades about -0.04 of its total potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.12 per unit of volatility. If you would invest  2,326  in Oxford Lane Capital on September 21, 2024 and sell it today you would earn a total of  35.00  from holding Oxford Lane Capital or generate 1.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy98.44%
ValuesDaily Returns

Broad Capital Acquisition  vs.  Oxford Lane Capital

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -0.50.00.51.01.5
JavaScript chart by amCharts 3.21.15BRACU OXLCZ
       Timeline  
Broad Capital Acquisition 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Broad Capital Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Broad Capital is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec11.3511.411.45
Oxford Lane Capital 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Oxford Lane is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec23.223.323.423.523.623.7

Broad Capital and Oxford Lane Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.19-0.0845-0.0563-0.0282-0.0013410.02420.04970.07650.120.33 24681012
JavaScript chart by amCharts 3.21.15BRACU OXLCZ
       Returns  

Pair Trading with Broad Capital and Oxford Lane

The main advantage of trading using opposite Broad Capital and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broad Capital position performs unexpectedly, Oxford Lane 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 Oxford Lane will offset losses from the drop in Oxford Lane's long position.
The idea behind Broad Capital Acquisition and Oxford Lane 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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