Correlation Between Oxford Lane and New York
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and New York 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 New York 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 New York Mortgage, you can compare the effects of market volatilities on Oxford Lane and New York 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 New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and New York.
Diversification Opportunities for Oxford Lane and New York
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oxford and New is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Oxford Lane i.e., Oxford Lane and New York go up and down completely randomly.
Pair Corralation between Oxford Lane and New York
Assuming the 90 days horizon Oxford Lane is expected to generate 1.59 times less return on investment than New York. But when comparing it to its historical volatility, Oxford Lane Capital is 1.06 times less risky than New York. It trades about 0.07 of its potential returns per unit of risk. New York Mortgage is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,925 in New York Mortgage on August 28, 2024 and sell it today you would earn a total of 568.00 from holding New York Mortgage or generate 29.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.02% |
| Values | Daily Returns |
Oxford Lane Capital vs. New York Mortgage
Performance |
| Timeline |
| Oxford Lane Capital |
| New York Mortgage |
Oxford Lane and New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and New York
The main advantage of trading using opposite Oxford Lane and New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, New York 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 New York will offset losses from the drop in New York'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 |
| New York vs. Annaly Capital Management | New York vs. Invesco Mortgage Capital | New York vs. Invesco Mortgage Capital | New York vs. Chimera Investment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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