Correlation Between New York and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both New York 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 New York and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New York Mortgage and Oxford Lane Capital, you can compare the effects of market volatilities on New York 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 New York with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Oxford Lane.
Diversification Opportunities for New York and Oxford Lane
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Oxford is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding New York Mortgage 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 New York 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 New York Mortgage 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 New York i.e., New York and Oxford Lane go up and down completely randomly.
Pair Corralation between New York and Oxford Lane
Assuming the 90 days horizon New York Mortgage is expected to generate 1.06 times more return on investment than Oxford Lane. However, New York is 1.06 times more volatile than Oxford Lane Capital. It trades about 0.1 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.07 per unit of risk. If you would invest 1,925 in New York Mortgage on August 28, 2024 and sell it today you would earn a total of 568.00 from holding New York Mortgage or generate 29.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.02% |
| Values | Daily Returns |
New York Mortgage vs. Oxford Lane Capital
Performance |
| Timeline |
| New York Mortgage |
| Oxford Lane Capital |
New York and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and Oxford Lane
The main advantage of trading using opposite New York and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York 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.| New York vs. Annaly Capital Management | New York vs. Invesco Mortgage Capital | New York vs. Invesco Mortgage Capital | New York vs. Chimera Investment |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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