Correlation Between Oxford Lane and MainStay CBRE

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

Diversification Opportunities for Oxford Lane and MainStay CBRE

-0.64

Correlation Coefficient

Oxford Lane  MainStay CBRE

Excellent diversification

The 3 months correlation between Oxford and MainStay is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and MainStay CBRE Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MainStay CBRE Global 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 MainStay CBRE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MainStay CBRE Global has no effect on the direction of Oxford Lane i.e., Oxford Lane and MainStay CBRE go up and down completely randomly.

Pair Corralation between Oxford Lane and MainStay CBRE

Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 0.56 times more return on investment than MainStay CBRE. However, Oxford Lane Capital is 1.79 times less risky than MainStay CBRE. It trades about 0.11 of its potential returns per unit of risk. MainStay CBRE Global is currently generating about 0.02 per unit of risk. If you would invest  506.00  in Oxford Lane Capital on September 3, 2024 and sell it today you would earn a total of  20.00  from holding Oxford Lane Capital or generate 3.95% return on investment over 90 days.

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

Oxford Lane Capital  vs.  MainStay CBRE Global

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.

MainStay CBRE Global

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MainStay CBRE Global are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, MainStay CBRE is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Oxford Lane and MainStay CBRE

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

The idea behind Oxford Lane Capital and MainStay CBRE Global 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.