Correlation Between Voya Emerging and Oxford Lane

Can any of the company-specific risk be diversified away by investing in both Voya Emerging 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 Voya Emerging and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Voya Emerging Markets and Oxford Lane Capital, you can compare the effects of market volatilities on Voya Emerging 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 Voya Emerging with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Emerging and Oxford Lane.

Diversification Opportunities for Voya Emerging and Oxford Lane

0.83

Correlation Coefficient

Voya Emerging  Oxford Lane

Very poor diversification

The 3 months correlation between Voya and Oxford is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Voya Emerging Markets 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 Voya Emerging 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 Voya Emerging Markets 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 Voya Emerging i.e., Voya Emerging and Oxford Lane go up and down completely randomly.

Pair Corralation between Voya Emerging and Oxford Lane

Considering the 90-day investment horizon Voya Emerging Markets is expected to generate 1.75 times more return on investment than Oxford Lane. However, Voya Emerging is 1.75 times more volatile than Oxford Lane Capital. It trades about 0.17 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.15 per unit of risk. If you would invest  504.00  in Voya Emerging Markets on December 2, 2024 and sell it today you would earn a total of  30.00  from holding Voya Emerging Markets or generate 5.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Voya Emerging Markets  vs.  Oxford Lane Capital

Voya Emerging Markets

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Emerging Markets are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical indicators, Voya Emerging may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Oxford Lane Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Oxford Lane is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Voya Emerging and Oxford Lane

The main advantage of trading using opposite Voya Emerging and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Emerging 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.

The idea behind Voya Emerging Markets and Oxford Lane Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.