Correlation Between Oxford Lane and Cornerstone Strategic

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

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

Diversification Opportunities for Oxford Lane and Cornerstone Strategic

0.38

Correlation Coefficient

Oxford Lane  Cornerstone Strategic

Weak diversification

The 3 months correlation between Oxford and Cornerstone is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic and Oxford Lane 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 Lane Capital are associated (or correlated) with Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Oxford Lane i.e., Oxford Lane and Cornerstone Strategic go up and down completely randomly.

Pair Corralation between Oxford Lane and Cornerstone Strategic

Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 0.24 times more return on investment than Cornerstone Strategic. However, Oxford Lane Capital is 4.11 times less risky than Cornerstone Strategic. It trades about 0.05 of its potential returns per unit of risk. Cornerstone Strategic Return is currently generating about -0.09 per unit of risk. If you would invest  499.00  in Oxford Lane Capital on November 28, 2024 and sell it today you would earn a total of  8.00  from holding Oxford Lane Capital or generate 1.6% return on investment over 90 days.

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

Oxford Lane Capital  vs.  Cornerstone Strategic Return

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 4 (%) 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.

Cornerstone Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornerstone Strategic Return has generated negative risk-adjusted returns adding no value to fund investors. Despite latest unfluctuating performance, the Fund's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the mutual fund stockholders.

Pair Trading with Oxford Lane and Cornerstone Strategic

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

The idea behind Oxford Lane Capital and Cornerstone Strategic Return 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.