Correlation Between Oxford Lane and Invesco Advantage
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Invesco Advantage 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 Invesco Advantage 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 Invesco Advantage MIT, you can compare the effects of market volatilities on Oxford Lane and Invesco Advantage 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 Invesco Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Invesco Advantage.
Diversification Opportunities for Oxford Lane and Invesco Advantage
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oxford and Invesco is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Invesco Advantage MIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Advantage MIT 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 Invesco Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Advantage MIT has no effect on the direction of Oxford Lane i.e., Oxford Lane and Invesco Advantage go up and down completely randomly.
Pair Corralation between Oxford Lane and Invesco Advantage
Assuming the 90 days horizon Oxford Lane is expected to generate 3.04 times less return on investment than Invesco Advantage. But when comparing it to its historical volatility, Oxford Lane Capital is 1.29 times less risky than Invesco Advantage. It trades about 0.07 of its potential returns per unit of risk. Invesco Advantage MIT is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 882.00 in Invesco Advantage MIT on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Invesco Advantage MIT or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Lane Capital vs. Invesco Advantage MIT
Performance |
| Timeline |
| Oxford Lane Capital |
| Invesco Advantage MIT |
Oxford Lane and Invesco Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and Invesco Advantage
The main advantage of trading using opposite Oxford Lane and Invesco Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, Invesco Advantage 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 Invesco Advantage will offset losses from the drop in Invesco Advantage'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 |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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