Correlation Between Oxford Lane and Pimco Dynamic
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Pimco Dynamic 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 Pimco Dynamic 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 Pimco Dynamic Income, you can compare the effects of market volatilities on Oxford Lane and Pimco Dynamic 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 Pimco Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Pimco Dynamic.
Diversification Opportunities for Oxford Lane and Pimco Dynamic
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oxford and Pimco is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Pimco Dynamic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Dynamic 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 Pimco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Dynamic Income has no effect on the direction of Oxford Lane i.e., Oxford Lane and Pimco Dynamic go up and down completely randomly.
Pair Corralation between Oxford Lane and Pimco Dynamic
Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 1.07 times more return on investment than Pimco Dynamic. However, Oxford Lane is 1.07 times more volatile than Pimco Dynamic Income. It trades about 0.08 of its potential returns per unit of risk. Pimco Dynamic Income is currently generating about -0.07 per unit of risk. If you would invest 516.00 in Oxford Lane Capital on August 31, 2024 and sell it today you would earn a total of 6.00 from holding Oxford Lane Capital or generate 1.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Lane Capital vs. Pimco Dynamic Income
Performance |
| Timeline |
| Oxford Lane Capital |
| Pimco Dynamic Income |
Oxford Lane and Pimco Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and Pimco Dynamic
The main advantage of trading using opposite Oxford Lane and Pimco Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, Pimco Dynamic 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 Pimco Dynamic will offset losses from the drop in Pimco Dynamic's long position.| Oxford Lane vs. HUMANA INC | Oxford Lane vs. SCOR PK | Oxford Lane vs. Aquagold International | Oxford Lane vs. Thrivent High Yield |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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