Correlation Between Virtus AllianzGI and Oxford Lane

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

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

Diversification Opportunities for Virtus AllianzGI and Oxford Lane

-0.77

Correlation Coefficient

Virtus AllianzGI  Oxford Lane

Pay attention - limited upside

The 3 months correlation between Virtus and Oxford is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Virtus AllianzGI Convertible 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 Virtus AllianzGI 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 Virtus AllianzGI Convertible 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 Virtus AllianzGI i.e., Virtus AllianzGI and Oxford Lane go up and down completely randomly.

Pair Corralation between Virtus AllianzGI and Oxford Lane

Assuming the 90 days trading horizon Virtus AllianzGI is expected to generate 2.48 times less return on investment than Oxford Lane. In addition to that, Virtus AllianzGI is 1.24 times more volatile than Oxford Lane Capital. It trades about 0.02 of its total potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.07 per unit of volatility. If you would invest  2,022  in Oxford Lane Capital on October 12, 2024 and sell it today you would earn a total of  390.00  from holding Oxford Lane Capital or generate 19.29% return on investment over 90 days.

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

Virtus AllianzGI Convertible  vs.  Oxford Lane Capital

Virtus AllianzGI Con

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus AllianzGI Convertible has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Oxford Lane Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Oxford Lane is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Virtus AllianzGI and Oxford Lane

The main advantage of trading using opposite Virtus AllianzGI and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus AllianzGI 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 Virtus AllianzGI Convertible 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.