Correlation Between Nuveen Municipal and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both Nuveen Municipal 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 Nuveen Municipal and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Municipal Value and Oxford Lane Capital, you can compare the effects of market volatilities on Nuveen Municipal 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 Nuveen Municipal with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipal and Oxford Lane.
Diversification Opportunities for Nuveen Municipal and Oxford Lane
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuveen and Oxford is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipal Value 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 Nuveen Municipal 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 Nuveen Municipal Value 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 Nuveen Municipal i.e., Nuveen Municipal and Oxford Lane go up and down completely randomly.
Pair Corralation between Nuveen Municipal and Oxford Lane
Considering the 90-day investment horizon Nuveen Municipal Value is expected to under-perform the Oxford Lane. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen Municipal Value is 1.23 times less risky than Oxford Lane. The fund trades about -0.01 of its potential returns per unit of risk. The Oxford Lane Capital is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 506.00 in Oxford Lane Capital on September 13, 2024 and sell it today you would earn a total of 19.00 from holding Oxford Lane Capital or generate 3.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Nuveen Municipal Value vs. Oxford Lane Capital
Performance |
Timeline |
Nuveen Municipal Value |
Oxford Lane Capital |
Nuveen Municipal and Oxford Lane Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nuveen Municipal and Oxford Lane
The main advantage of trading using opposite Nuveen Municipal and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipal 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.Nuveen Municipal vs. MFS Investment Grade | Nuveen Municipal vs. Eaton Vance Municipal | Nuveen Municipal vs. DTF Tax Free | Nuveen Municipal vs. Aquagold International |
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Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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