Correlation Between Oxford Lane and Eaton Vance

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

Diversification Opportunities for Oxford Lane and Eaton Vance

0.65

Correlation Coefficient

Oxford Lane  Eaton Vance

Poor diversification

The 3 months correlation between Oxford and Eaton is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Eaton Vance Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Risk 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Risk has no effect on the direction of Oxford Lane i.e., Oxford Lane and Eaton Vance go up and down completely randomly.

Pair Corralation between Oxford Lane and Eaton Vance

Given the investment horizon of 90 days Oxford Lane is expected to generate 1.5 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, Oxford Lane Capital is 1.08 times less risky than Eaton Vance. It trades about 0.11 of its potential returns per unit of risk. Eaton Vance Risk is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  891.00  in Eaton Vance Risk on September 13, 2024 and sell it today you would earn a total of  51.00  from holding Eaton Vance Risk or generate 5.72% return on investment over 90 days.

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

Oxford Lane Capital  vs.  Eaton Vance Risk

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. 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.

Eaton Vance Risk

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Risk are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady basic indicators, Eaton Vance is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Oxford Lane and Eaton Vance

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

The idea behind Oxford Lane Capital and Eaton Vance Risk 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.