Correlation Between Oxford Lane and Nuveen Amt

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

Diversification Opportunities for Oxford Lane and Nuveen Amt

0.32

Correlation Coefficient

Oxford Lane  Nuveen Amt

Weak diversification

The 3 months correlation between Oxford and Nuveen is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Nuveen Amt Free Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Amt Free 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 Nuveen Amt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Amt Free has no effect on the direction of Oxford Lane i.e., Oxford Lane and Nuveen Amt go up and down completely randomly.

Pair Corralation between Oxford Lane and Nuveen Amt

Given the investment horizon of 90 days Oxford Lane Capital is expected to under-perform the Nuveen Amt. In addition to that, Oxford Lane is 3.21 times more volatile than Nuveen Amt Free Municipal. It trades about -0.11 of its total potential returns per unit of risk. Nuveen Amt Free Municipal is currently generating about 0.16 per unit of volatility. If you would invest  1,323  in Nuveen Amt Free Municipal on December 20, 2024 and sell it today you would earn a total of  52.00  from holding Nuveen Amt Free Municipal or generate 3.93% 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.  Nuveen Amt Free Municipal

Oxford Lane Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oxford Lane Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Nuveen Amt Free

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Amt Free Municipal are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Nuveen Amt is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Oxford Lane and Nuveen Amt

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

The idea behind Oxford Lane Capital and Nuveen Amt Free Municipal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.