Correlation Between Oxford Lane and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and ASSA ABLOY 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 Oxford Lane and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Lane Capital and ASSA ABLOY AB, you can compare the effects of market volatilities on Oxford Lane and ASSA ABLOY 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 Oxford Lane with a short position of ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and ASSA ABLOY.
Diversification Opportunities for Oxford Lane and ASSA ABLOY
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oxford and ASSA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB and Oxford Lane 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 Oxford Lane Capital are associated (or correlated) with ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of Oxford Lane i.e., Oxford Lane and ASSA ABLOY go up and down completely randomly.
Pair Corralation between Oxford Lane and ASSA ABLOY
Given the investment horizon of 90 days Oxford Lane is expected to generate 1.67 times less return on investment than ASSA ABLOY. But when comparing it to its historical volatility, Oxford Lane Capital is 1.69 times less risky than ASSA ABLOY. It trades about 0.05 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,797 in ASSA ABLOY AB on September 3, 2024 and sell it today you would earn a total of 289.00 from holding ASSA ABLOY AB or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Oxford Lane Capital vs. ASSA ABLOY AB
Performance |
| Timeline |
| Oxford Lane Capital |
| ASSA ABLOY AB |
Oxford Lane and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and ASSA ABLOY
The main advantage of trading using opposite Oxford Lane and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, ASSA ABLOY 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 ASSA ABLOY will offset losses from the drop in ASSA ABLOY's long position.| Oxford Lane vs. Capital Southwest | Oxford Lane vs. XAI Octagon Floating | Oxford Lane vs. Cornerstone Strategic Return | Oxford Lane vs. Cornerstone Strategic Value |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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