Correlation Between Oxford Lane and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Nuveen Preferred 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 Nuveen Preferred 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 Nuveen Preferred Income, you can compare the effects of market volatilities on Oxford Lane and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Nuveen Preferred.
Diversification Opportunities for Oxford Lane and Nuveen Preferred
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oxford and Nuveen is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Nuveen Preferred Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Income 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 Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred Income has no effect on the direction of Oxford Lane i.e., Oxford Lane and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Oxford Lane and Nuveen Preferred
Given the investment horizon of 90 days Oxford Lane is expected to generate 1.32 times less return on investment than Nuveen Preferred. In addition to that, Oxford Lane is 1.4 times more volatile than Nuveen Preferred Income. It trades about 0.08 of its total potential returns per unit of risk. Nuveen Preferred Income is currently generating about 0.16 per unit of volatility. 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 |
Oxford Lane Capital vs. Nuveen Preferred Income
Performance |
| Timeline |
| Oxford Lane Capital |
| Nuveen Preferred Income |
Oxford Lane and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and Nuveen Preferred
The main advantage of trading using opposite Oxford Lane and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, Nuveen Preferred 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 Nuveen Preferred will offset losses from the drop in Nuveen Preferred'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 |
| Nuveen Preferred vs. Oxford Lane Capital | Nuveen Preferred vs. Orchid Island Capital | Nuveen Preferred vs. Guggenheim Strategic Opportunities | Nuveen Preferred vs. Stone Harbor Emerging |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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