Correlation Between Virtu Financial and Oxford Lane

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Can any of the company-specific risk be diversified away by investing in both Virtu Financial 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 Virtu Financial and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtu Financial and Oxford Lane Capital, you can compare the effects of market volatilities on Virtu Financial 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 Virtu Financial with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtu Financial and Oxford Lane.

Diversification Opportunities for Virtu Financial and Oxford Lane

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Virtu and Oxford is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Virtu Financial 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 Virtu Financial 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 Virtu Financial 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 Virtu Financial i.e., Virtu Financial and Oxford Lane go up and down completely randomly.

Pair Corralation between Virtu Financial and Oxford Lane

Given the investment horizon of 90 days Virtu Financial is expected to generate 9.42 times more return on investment than Oxford Lane. However, Virtu Financial is 9.42 times more volatile than Oxford Lane Capital. It trades about 0.14 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.17 per unit of risk. If you would invest  3,144  in Virtu Financial on September 19, 2024 and sell it today you would earn a total of  485.00  from holding Virtu Financial or generate 15.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Virtu Financial  vs.  Oxford Lane Capital

 Performance 
       Timeline  
Virtu Financial 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Virtu Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Virtu Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.
Oxford Lane Capital 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Oxford Lane is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Virtu Financial and Oxford Lane Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Virtu Financial and Oxford Lane

The main advantage of trading using opposite Virtu Financial and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtu Financial 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.
The idea behind Virtu Financial and Oxford Lane 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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