Correlation Between Oxford Lane and Mexico Equity

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

Diversification Opportunities for Oxford Lane and Mexico Equity

-0.73

Correlation Coefficient

Oxford Lane  Mexico Equity

Pay attention - limited upside

The 3 months correlation between Oxford and Mexico is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Mexico Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico Equity And 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 Mexico Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Equity And has no effect on the direction of Oxford Lane i.e., Oxford Lane and Mexico Equity go up and down completely randomly.

Pair Corralation between Oxford Lane and Mexico Equity

Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 0.72 times more return on investment than Mexico Equity. However, Oxford Lane Capital is 1.38 times less risky than Mexico Equity. It trades about 0.08 of its potential returns per unit of risk. Mexico Equity And is currently generating about -0.02 per unit of risk. If you would invest  403.00  in Oxford Lane Capital on September 12, 2024 and sell it today you would earn a total of  121.50  from holding Oxford Lane Capital or generate 30.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.7%
Values	Daily Returns

Oxford Lane Capital  vs.  Mexico Equity And

Oxford Lane Capital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 7 (%) 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.

Mexico Equity And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mexico Equity And has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Mexico Equity is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oxford Lane and Mexico Equity

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

The idea behind Oxford Lane Capital and Mexico Equity And 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..