Correlation Between Oxford Square and Prospect Capital
Can any of the company-specific risk be diversified away by investing in both Oxford Square and Prospect Capital 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 Square and Prospect Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Square Capital and Prospect Capital, you can compare the effects of market volatilities on Oxford Square and Prospect Capital 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 Square with a short position of Prospect Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Square and Prospect Capital.
Diversification Opportunities for Oxford Square and Prospect Capital
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oxford and Prospect is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Square Capital and Prospect Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospect Capital and Oxford Square 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 Square Capital are associated (or correlated) with Prospect Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospect Capital has no effect on the direction of Oxford Square i.e., Oxford Square and Prospect Capital go up and down completely randomly.
Pair Corralation between Oxford Square and Prospect Capital
Given the investment horizon of 90 days Oxford Square Capital is expected to generate 0.67 times more return on investment than Prospect Capital. However, Oxford Square Capital is 1.48 times less risky than Prospect Capital. It trades about 0.03 of its potential returns per unit of risk. Prospect Capital is currently generating about 0.0 per unit of risk. If you would invest 231.00 in Oxford Square Capital on August 26, 2024 and sell it today you would earn a total of 31.00 from holding Oxford Square Capital or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oxford Square Capital vs. Prospect Capital
Performance |
| Timeline |
| Oxford Square Capital |
| Prospect Capital |
Oxford Square and Prospect Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oxford Square and Prospect Capital
The main advantage of trading using opposite Oxford Square and Prospect Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Square position performs unexpectedly, Prospect Capital 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 Prospect Capital will offset losses from the drop in Prospect Capital's long position.| Oxford Square vs. Eagle Point Credit | Oxford Square vs. Cornerstone Strategic Return | Oxford Square vs. Cornerstone Strategic Value | Oxford Square vs. Guggenheim Strategic Opportunities |
| Prospect Capital vs. PowerUp Acquisition Corp | Prospect Capital vs. Aurora Innovation | Prospect Capital vs. HUMANA INC | Prospect Capital vs. Aquagold International |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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