Correlation Between Oxford Lane and RiverNorthDoubleLine
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and RiverNorthDoubleLine 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 RiverNorthDoubleLine 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 RiverNorthDoubleLine Strategic Opportunity, you can compare the effects of market volatilities on Oxford Lane and RiverNorthDoubleLine 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 RiverNorthDoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and RiverNorthDoubleLine.
Diversification Opportunities for Oxford Lane and RiverNorthDoubleLine
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oxford and RiverNorthDoubleLine is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and RiverNorthDoubleLine Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorthDoubleLine 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 RiverNorthDoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorthDoubleLine has no effect on the direction of Oxford Lane i.e., Oxford Lane and RiverNorthDoubleLine go up and down completely randomly.
Pair Corralation between Oxford Lane and RiverNorthDoubleLine
Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 1.38 times more return on investment than RiverNorthDoubleLine. However, Oxford Lane is 1.38 times more volatile than RiverNorthDoubleLine Strategic Opportunity. It trades about 0.1 of its potential returns per unit of risk. RiverNorthDoubleLine Strategic Opportunity is currently generating about 0.08 per unit of risk. If you would invest 372.00 in Oxford Lane Capital on August 28, 2024 and sell it today you would earn a total of 150.00 from holding Oxford Lane Capital or generate 40.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Oxford Lane Capital vs. RiverNorthDoubleLine Strategic
Performance |
| Timeline |
| Oxford Lane Capital |
| RiverNorthDoubleLine |
Oxford Lane and RiverNorthDoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and RiverNorthDoubleLine
The main advantage of trading using opposite Oxford Lane and RiverNorthDoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, RiverNorthDoubleLine 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 RiverNorthDoubleLine will offset losses from the drop in RiverNorthDoubleLine'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 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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