Correlation Between Oxford Lane and FAM
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and FAM 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 FAM 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 FAM, you can compare the effects of market volatilities on Oxford Lane and FAM 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 FAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and FAM.
Diversification Opportunities for Oxford Lane and FAM
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oxford and FAM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and FAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAM 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 FAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAM has no effect on the direction of Oxford Lane i.e., Oxford Lane and FAM go up and down completely randomly.
Pair Corralation between Oxford Lane and FAM
Assuming the 90 days horizon Oxford Lane is expected to generate 1.36 times less return on investment than FAM. In addition to that, Oxford Lane is 1.79 times more volatile than FAM. It trades about 0.04 of its total potential returns per unit of risk. FAM is currently generating about 0.09 per unit of volatility. If you would invest 487.00 in FAM on August 29, 2024 and sell it today you would earn a total of 187.00 from holding FAM or generate 38.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 92.21% |
| Values | Daily Returns |
Oxford Lane Capital vs. FAM
Performance |
| Timeline |
| Oxford Lane Capital |
| FAM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Oxford Lane and FAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and FAM
The main advantage of trading using opposite Oxford Lane and FAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, FAM 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 FAM will offset losses from the drop in FAM's long position.| Oxford Lane vs. Oxford Lane Capital | Oxford Lane vs. Oxford Lane Capital | Oxford Lane vs. The Gabelli Multimedia | Oxford Lane vs. The Gabelli Equity |
| FAM vs. Blackstone Gso Long | FAM vs. Blackstone Gso Senior | FAM vs. Nuveen Floating Rate | FAM vs. Pioneer Floating Rate |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stocks Directory Find actively traded stocks across global markets |