Correlation Between Oxford Lane and Calamos Convertible

Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Calamos Convertible 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 Oxford Lane and Calamos Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oxford Lane Capital and Calamos Convertible Opportunities, you can compare the effects of market volatilities on Oxford Lane and Calamos Convertible 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 Oxford Lane with a short position of Calamos Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Calamos Convertible.

Diversification Opportunities for Oxford Lane and Calamos Convertible

0.7

Correlation Coefficient

Oxford Lane  Calamos Convertible

Poor diversification

The 3 months correlation between Oxford and Calamos is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Calamos Convertible Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calamos Convertible and Oxford Lane 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 Oxford Lane Capital are associated (or correlated) with Calamos Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calamos Convertible has no effect on the direction of Oxford Lane i.e., Oxford Lane and Calamos Convertible go up and down completely randomly.

Pair Corralation between Oxford Lane and Calamos Convertible

Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 1.06 times more return on investment than Calamos Convertible. However, Oxford Lane is 1.06 times more volatile than Calamos Convertible Opportunities. It trades about 0.08 of its potential returns per unit of risk. Calamos Convertible Opportunities is currently generating about 0.06 per unit of risk. If you would invest  348.00  in Oxford Lane Capital on September 12, 2024 and sell it today you would earn a total of  175.00  from holding Oxford Lane Capital or generate 50.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Oxford Lane Capital  vs.  Calamos Convertible Opportunit

Oxford Lane Capital

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Oxford Lane is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Calamos Convertible

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Calamos Convertible Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly unsteady technical indicators, Calamos Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Oxford Lane and Calamos Convertible

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

The idea behind Oxford Lane Capital and Calamos Convertible Opportunities 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.