Correlation Between Special Opportunities and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both Special Opportunities and Oxford Lane 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 Special Opportunities and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Special Opportunities Closed and Oxford Lane Capital, you can compare the effects of market volatilities on Special Opportunities and Oxford Lane 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 Special Opportunities with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Special Opportunities and Oxford Lane.
Diversification Opportunities for Special Opportunities and Oxford Lane
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Special and Oxford is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Special Opportunities Closed and Oxford Lane Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Lane Capital and Special Opportunities 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 Special Opportunities Closed are associated (or correlated) with Oxford Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Lane Capital has no effect on the direction of Special Opportunities i.e., Special Opportunities and Oxford Lane go up and down completely randomly.
Pair Corralation between Special Opportunities and Oxford Lane
Considering the 90-day investment horizon Special Opportunities Closed is expected to generate 1.31 times more return on investment than Oxford Lane. However, Special Opportunities is 1.31 times more volatile than Oxford Lane Capital. It trades about 0.24 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.12 per unit of risk. If you would invest 1,459 in Special Opportunities Closed on October 22, 2024 and sell it today you would earn a total of 46.00 from holding Special Opportunities Closed or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Special Opportunities Closed vs. Oxford Lane Capital
Performance |
| Timeline |
| Special Opportunities |
| Oxford Lane Capital |
Special Opportunities and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Special Opportunities and Oxford Lane
The main advantage of trading using opposite Special Opportunities and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Special Opportunities position performs unexpectedly, Oxford Lane 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 Oxford Lane will offset losses from the drop in Oxford Lane's long position.| Special Opportunities vs. Ares Dynamic Credit | Special Opportunities vs. Lazard Global Total | Special Opportunities vs. Principal Real Estate | Special Opportunities vs. Tortoise Capital Series |
| Oxford Lane vs. Capital Southwest | Oxford Lane vs. XAI Octagon Floating | Oxford Lane vs. Cornerstone Strategic Return | Oxford Lane vs. Cornerstone Strategic Value |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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