Correlation Between Oxford Lane and Tri-ContinentalPFD
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Tri-ContinentalPFD 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 Tri-ContinentalPFD 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 Tri Continental PFD, you can compare the effects of market volatilities on Oxford Lane and Tri-ContinentalPFD 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 Tri-ContinentalPFD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Tri-ContinentalPFD.
Diversification Opportunities for Oxford Lane and Tri-ContinentalPFD
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oxford and Tri-ContinentalPFD is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Tri Continental PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tri Continental PFD 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 Tri-ContinentalPFD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tri Continental PFD has no effect on the direction of Oxford Lane i.e., Oxford Lane and Tri-ContinentalPFD go up and down completely randomly.
Pair Corralation between Oxford Lane and Tri-ContinentalPFD
Assuming the 90 days horizon Oxford Lane Capital is expected to generate 0.41 times more return on investment than Tri-ContinentalPFD. However, Oxford Lane Capital is 2.46 times less risky than Tri-ContinentalPFD. It trades about 0.18 of its potential returns per unit of risk. Tri Continental PFD is currently generating about -0.24 per unit of risk. If you would invest 2,381 in Oxford Lane Capital on August 28, 2024 and sell it today you would earn a total of 26.00 from holding Oxford Lane Capital or generate 1.09% 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. Tri Continental PFD
Performance |
| Timeline |
| Oxford Lane Capital |
| Tri Continental PFD |
Oxford Lane and Tri-ContinentalPFD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Lane and Tri-ContinentalPFD
The main advantage of trading using opposite Oxford Lane and Tri-ContinentalPFD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, Tri-ContinentalPFD 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 Tri-ContinentalPFD will offset losses from the drop in Tri-ContinentalPFD's long position.| Oxford Lane vs. The Gabelli Multimedia | Oxford Lane vs. The Gabelli Multimedia | Oxford Lane vs. The Gabelli Dividend | 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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