Correlation Between Oxford Lane and Pimco Dynamic

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

Diversification Opportunities for Oxford Lane and Pimco Dynamic

0.05

Correlation Coefficient

Oxford Lane  Pimco Dynamic

Significant diversification

The 3 months correlation between Oxford and Pimco is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Pimco Dynamic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Dynamic Income 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 Pimco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Dynamic Income has no effect on the direction of Oxford Lane i.e., Oxford Lane and Pimco Dynamic go up and down completely randomly.

Pair Corralation between Oxford Lane and Pimco Dynamic

Given the investment horizon of 90 days Oxford Lane Capital is expected to under-perform the Pimco Dynamic. In addition to that, Oxford Lane is 2.7 times more volatile than Pimco Dynamic Income. It trades about -0.04 of its total potential returns per unit of risk. Pimco Dynamic Income is currently generating about 0.21 per unit of volatility. If you would invest  1,292  in Pimco Dynamic Income on December 27, 2024 and sell it today you would earn a total of  92.00  from holding Pimco Dynamic Income or generate 7.12% return on investment over 90 days.

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

Oxford Lane Capital  vs.  Pimco Dynamic Income

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 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.

Pimco Dynamic Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Pimco Dynamic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Oxford Lane and Pimco Dynamic

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

The idea behind Oxford Lane Capital and Pimco Dynamic Income 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.