Correlation Between Oxford Square and Navient SR

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

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

Diversification Opportunities for Oxford Square and Navient SR

-0.2

Correlation Coefficient

Oxford Square  Navient SR

Good diversification

The 3 months correlation between Oxford and Navient is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Square Capital and Navient SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navient SR and Oxford Square 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 Square Capital are associated (or correlated) with Navient SR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navient SR has no effect on the direction of Oxford Square i.e., Oxford Square and Navient SR go up and down completely randomly.

Pair Corralation between Oxford Square and Navient SR

Assuming the 90 days horizon Oxford Square Capital is expected to generate 0.29 times more return on investment than Navient SR. However, Oxford Square Capital is 3.45 times less risky than Navient SR. It trades about 0.14 of its potential returns per unit of risk. Navient SR is currently generating about -0.01 per unit of risk. If you would invest  2,415  in Oxford Square Capital on September 5, 2024 and sell it today you would earn a total of  61.00  from holding Oxford Square Capital or generate 2.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Oxford Square Capital  vs.  Navient SR

Oxford Square Capital

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Square Capital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Oxford Square is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Navient SR

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Navient SR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Navient SR is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Oxford Square and Navient SR

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

The idea behind Oxford Square Capital and Navient SR 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.