Correlation Between Oxford Lane and Allspring Income

Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Allspring Income 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 Allspring Income 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 Allspring Income Opportunities, you can compare the effects of market volatilities on Oxford Lane and Allspring Income 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 Allspring Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Allspring Income.

Diversification Opportunities for Oxford Lane and Allspring Income

0.84

Correlation Coefficient

Oxford Lane  Allspring Income

Very poor diversification

The 3 months correlation between Oxford and Allspring is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Allspring Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allspring Income Opp 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 Allspring Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allspring Income Opp has no effect on the direction of Oxford Lane i.e., Oxford Lane and Allspring Income go up and down completely randomly.

Pair Corralation between Oxford Lane and Allspring Income

Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 1.52 times more return on investment than Allspring Income. However, Oxford Lane is 1.52 times more volatile than Allspring Income Opportunities. It trades about 0.07 of its potential returns per unit of risk. Allspring Income Opportunities is currently generating about 0.07 per unit of risk. If you would invest  500.00  in Oxford Lane Capital on December 3, 2024 and sell it today you would earn a total of  4.00  from holding Oxford Lane Capital or generate 0.8% return on investment over 90 days.

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

Oxford Lane Capital  vs.  Allspring Income Opportunities

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.

Allspring Income Opp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allspring Income Opportunities are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Allspring Income is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oxford Lane and Allspring Income

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

The idea behind Oxford Lane Capital and Allspring Income Opportunities 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.