Correlation Between Oxford Lane and Oxford Square
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Oxford Square 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 Oxford Square 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 Oxford Square Capital, you can compare the effects of market volatilities on Oxford Lane and Oxford Square 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 Oxford Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Oxford Square.
Diversification Opportunities for Oxford Lane and Oxford Square
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oxford and Oxford is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Oxford Square Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Square Capital 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 Oxford Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Square Capital has no effect on the direction of Oxford Lane i.e., Oxford Lane and Oxford Square go up and down completely randomly.
Pair Corralation between Oxford Lane and Oxford Square
Assuming the 90 days horizon Oxford Lane is expected to generate 1.25 times less return on investment than Oxford Square. But when comparing it to its historical volatility, Oxford Lane Capital is 1.73 times less risky than Oxford Square. It trades about 0.07 of its potential returns per unit of risk. Oxford Square Capital is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,909 in Oxford Square Capital on September 26, 2024 and sell it today you would earn a total of 411.00 from holding Oxford Square Capital or generate 21.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Oxford Lane Capital vs. Oxford Square Capital
Performance |
Timeline |
Oxford Lane Capital |
Oxford Square Capital |
Oxford Lane and Oxford Square Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oxford Lane and Oxford Square
The main advantage of trading using opposite Oxford Lane and Oxford Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, Oxford Square 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 Square will offset losses from the drop in Oxford Square's long position.Oxford Lane vs. Oxford Lane Capital | Oxford Lane vs. Oxford Lane Capital | Oxford Lane vs. Eagle Point Credit | Oxford Lane vs. Eagle Point Credit |
Oxford Square vs. Oxford Square Capital | Oxford Square vs. Oxford Lane Capital | Oxford Square vs. B Riley Financial | Oxford Square vs. Gladstone Investment |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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