Correlation Between Nuveen Preferred and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred 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 Nuveen Preferred and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Preferred Income and Oxford Lane Capital, you can compare the effects of market volatilities on Nuveen Preferred 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 Nuveen Preferred with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Oxford Lane.
Diversification Opportunities for Nuveen Preferred and Oxford Lane
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Oxford is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred Income 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 Nuveen Preferred 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 Nuveen Preferred Income 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 Nuveen Preferred i.e., Nuveen Preferred and Oxford Lane go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Oxford Lane
Considering the 90-day investment horizon Nuveen Preferred Income is expected to generate 0.71 times more return on investment than Oxford Lane. However, Nuveen Preferred Income is 1.4 times less risky than Oxford Lane. It trades about 0.16 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.08 per unit of risk. If you would invest 569.00 in Nuveen Preferred Income on September 12, 2024 and sell it today you would earn a total of 247.00 from holding Nuveen Preferred Income or generate 43.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Nuveen Preferred Income vs. Oxford Lane Capital
Performance |
| Timeline |
| Nuveen Preferred Income |
| Oxford Lane Capital |
Nuveen Preferred and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Oxford Lane
The main advantage of trading using opposite Nuveen Preferred and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred 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.| Nuveen Preferred vs. Oxford Lane Capital | Nuveen Preferred vs. Orchid Island Capital | Nuveen Preferred vs. Guggenheim Strategic Opportunities | Nuveen Preferred vs. Stone Harbor Emerging |
| Oxford Lane vs. Capital Southwest | Oxford Lane vs. XAI Octagon Floating | Oxford Lane vs. Cornerstone Strategic Return | Oxford Lane vs. Cornerstone Strategic Value |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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