Correlation Between TravelCenters and Oxford Square

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

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

Diversification Opportunities for TravelCenters and Oxford Square

0.86

Correlation Coefficient

TravelCenters  Oxford Square

Very poor diversification

The 3 months correlation between TravelCenters and Oxford is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding TravelCenters Of America 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 TravelCenters 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 TravelCenters Of America 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 TravelCenters i.e., TravelCenters and Oxford Square go up and down completely randomly.

Pair Corralation between TravelCenters and Oxford Square

If you would invest  2,500  in Oxford Square Capital on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Oxford Square Capital or generate 0.0% return on investment over 90 days.

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

TravelCenters Of America  vs.  Oxford Square Capital

TravelCenters Of America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TravelCenters Of America has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, TravelCenters is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Oxford Square Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oxford Square Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Oxford Square is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with TravelCenters and Oxford Square

The main advantage of trading using opposite TravelCenters and Oxford Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TravelCenters 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.

The idea behind TravelCenters Of America and Oxford Square 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .