Correlation Between Oxford Lane and Blackrock Enhanced
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Blackrock Enhanced 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 Blackrock Enhanced 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 Blackrock Enhanced Equity, you can compare the effects of market volatilities on Oxford Lane and Blackrock Enhanced 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 Blackrock Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Blackrock Enhanced.
Diversification Opportunities for Oxford Lane and Blackrock Enhanced
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oxford and Blackrock is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Blackrock Enhanced Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Enhanced Equity 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 Blackrock Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Enhanced Equity has no effect on the direction of Oxford Lane i.e., Oxford Lane and Blackrock Enhanced go up and down completely randomly.
Pair Corralation between Oxford Lane and Blackrock Enhanced
Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 1.28 times more return on investment than Blackrock Enhanced. However, Oxford Lane is 1.28 times more volatile than Blackrock Enhanced Equity. It trades about 0.07 of its potential returns per unit of risk. Blackrock Enhanced Equity is currently generating about 0.06 per unit of risk. If you would invest 407.00 in Oxford Lane Capital on September 12, 2024 and sell it today you would earn a total of 116.00 from holding Oxford Lane Capital or generate 28.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Lane Capital vs. Blackrock Enhanced Equity
Performance |
| Timeline |
| Oxford Lane Capital |
| Blackrock Enhanced Equity |
Oxford Lane and Blackrock Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and Blackrock Enhanced
The main advantage of trading using opposite Oxford Lane and Blackrock Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, Blackrock Enhanced 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 Blackrock Enhanced will offset losses from the drop in Blackrock Enhanced'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 |
| Blackrock Enhanced vs. Cornerstone Strategic Value | Blackrock Enhanced vs. Oxford Lane Capital | Blackrock Enhanced vs. Orchid Island Capital | Blackrock Enhanced vs. Guggenheim Strategic Opportunities |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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