Correlation Between DTE Energy and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both DTE Energy 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 DTE Energy and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTE Energy Co and Oxford Lane Capital, you can compare the effects of market volatilities on DTE Energy 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 DTE Energy with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTE Energy and Oxford Lane.
Diversification Opportunities for DTE Energy and Oxford Lane
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DTE and Oxford is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding DTE Energy Co 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 DTE Energy 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 DTE Energy Co 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 DTE Energy i.e., DTE Energy and Oxford Lane go up and down completely randomly.
Pair Corralation between DTE Energy and Oxford Lane
Considering the 90-day investment horizon DTE Energy is expected to generate 1.52 times less return on investment than Oxford Lane. In addition to that, DTE Energy is 13.46 times more volatile than Oxford Lane Capital. It trades about 0.02 of its total potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.36 per unit of volatility. If you would invest 2,488 in Oxford Lane Capital on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Oxford Lane Capital or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 18.25% |
| Values | Daily Returns |
DTE Energy Co vs. Oxford Lane Capital
Performance |
| Timeline |
| DTE Energy |
| Oxford Lane Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DTE Energy and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTE Energy and Oxford Lane
The main advantage of trading using opposite DTE Energy and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTE Energy 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.| DTE Energy vs. Southern Co | DTE Energy vs. Duke Energy Corp | DTE Energy vs. Georgia Power Co | DTE Energy vs. Entergy Arkansas LLC |
| Oxford Lane vs. The Gabelli Multimedia | Oxford Lane vs. The Gabelli Equity | Oxford Lane vs. Virtus AllianzGI Convertible | 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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