Correlation Between GAMCO Natural and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both GAMCO Natural 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 GAMCO Natural and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMCO Natural Resources and Oxford Lane Capital, you can compare the effects of market volatilities on GAMCO Natural 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 GAMCO Natural with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Natural and Oxford Lane.
Diversification Opportunities for GAMCO Natural and Oxford Lane
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GAMCO and Oxford is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Natural Resources 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 GAMCO Natural 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 GAMCO Natural Resources 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 GAMCO Natural i.e., GAMCO Natural and Oxford Lane go up and down completely randomly.
Pair Corralation between GAMCO Natural and Oxford Lane
Assuming the 90 days trading horizon GAMCO Natural is expected to generate 4.04 times less return on investment than Oxford Lane. In addition to that, GAMCO Natural is 1.42 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 0.11 per unit of volatility. If you would invest 2,227 in Oxford Lane Capital on September 3, 2024 and sell it today you would earn a total of 71.00 from holding Oxford Lane Capital or generate 3.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMCO Natural Resources vs. Oxford Lane Capital
Performance |
| Timeline |
| GAMCO Natural Resources |
| Oxford Lane Capital |
GAMCO Natural and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Natural and Oxford Lane
The main advantage of trading using opposite GAMCO Natural and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Natural 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.| GAMCO Natural vs. The Gabelli Multimedia | GAMCO Natural vs. The Gabelli Equity | GAMCO Natural vs. Virtus AllianzGI Convertible | GAMCO Natural vs. John Hancock Income |
| Oxford Lane vs. The Gabelli Equity | Oxford Lane vs. The Gabelli Multimedia | Oxford Lane vs. The Gabelli Utility | Oxford Lane vs. GAMCO Natural Resources |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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