Correlation Between DTF Tax and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both DTF Tax 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 DTF Tax and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTF Tax Free and Oxford Lane Capital, you can compare the effects of market volatilities on DTF Tax 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 DTF Tax with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTF Tax and Oxford Lane.
Diversification Opportunities for DTF Tax and Oxford Lane
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DTF and Oxford is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding DTF Tax Free 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 DTF Tax 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 DTF Tax Free 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 DTF Tax i.e., DTF Tax and Oxford Lane go up and down completely randomly.
Pair Corralation between DTF Tax and Oxford Lane
Considering the 90-day investment horizon DTF Tax is expected to generate 1.86 times less return on investment than Oxford Lane. But when comparing it to its historical volatility, DTF Tax Free is 1.45 times less risky than Oxford Lane. It trades about 0.06 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,933 in Oxford Lane Capital on August 31, 2024 and sell it today you would earn a total of 365.00 from holding Oxford Lane Capital or generate 18.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
DTF Tax Free vs. Oxford Lane Capital
Performance |
| Timeline |
| DTF Tax Free |
| Oxford Lane Capital |
DTF Tax and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTF Tax and Oxford Lane
The main advantage of trading using opposite DTF Tax and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTF Tax 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.| DTF Tax vs. MFS Investment Grade | DTF Tax vs. Eaton Vance National | DTF Tax vs. Invesco High Income | DTF Tax vs. MFS High Yield |
| Oxford Lane vs. Oxford Lane Capital | Oxford Lane vs. Oxford Lane Capital | Oxford Lane vs. The Gabelli Multimedia | Oxford Lane vs. The Gabelli Equity |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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