Correlation Between Oxbridge and Greenlight Capital

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

By analyzing existing cross correlation between Oxbridge Re Holdings and Greenlight Capital Re, you can compare the effects of market volatilities on Oxbridge and Greenlight 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 Oxbridge with a short position of Greenlight Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxbridge and Greenlight Capital.

Diversification Opportunities for Oxbridge and Greenlight Capital

0.09

Correlation Coefficient

Oxbridge  Greenlight Capital

Significant diversification

The 3 months correlation between Oxbridge and Greenlight is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Oxbridge Re Holdings and Greenlight Capital Re in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenlight Capital and Oxbridge 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 Oxbridge Re Holdings are associated (or correlated) with Greenlight Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenlight Capital has no effect on the direction of Oxbridge i.e., Oxbridge and Greenlight Capital go up and down completely randomly.

Pair Corralation between Oxbridge and Greenlight Capital

Given the investment horizon of 90 days Oxbridge Re Holdings is expected to under-perform the Greenlight Capital. In addition to that, Oxbridge is 3.76 times more volatile than Greenlight Capital Re. It trades about -0.18 of its total potential returns per unit of risk. Greenlight Capital Re is currently generating about -0.01 per unit of volatility. If you would invest  1,383  in Greenlight Capital Re on December 30, 2024 and sell it today you would lose (26.00) from holding Greenlight Capital Re or give up 1.88% of portfolio value over 90 days.

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

Oxbridge Re Holdings  vs.  Greenlight Capital Re

Oxbridge Re Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oxbridge Re Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Greenlight Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greenlight Capital Re has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Greenlight Capital is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oxbridge and Greenlight Capital

The main advantage of trading using opposite Oxbridge and Greenlight Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxbridge position performs unexpectedly, Greenlight 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 Greenlight Capital will offset losses from the drop in Greenlight Capital's long position.

The idea behind Oxbridge Re Holdings and Greenlight Capital Re 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.