Correlation Between Oxford Lane and Lmp Capital

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

Diversification Opportunities for Oxford Lane and Lmp Capital

0.63

Correlation Coefficient

Oxford Lane  Lmp Capital

Poor diversification

The 3 months correlation between Oxford and Lmp is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Lmp Capital And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lmp Capital 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 Lmp Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lmp Capital And has no effect on the direction of Oxford Lane i.e., Oxford Lane and Lmp Capital go up and down completely randomly.

Pair Corralation between Oxford Lane and Lmp Capital

Given the investment horizon of 90 days Oxford Lane Capital is expected to generate 1.53 times more return on investment than Lmp Capital. However, Oxford Lane is 1.53 times more volatile than Lmp Capital And. It trades about -0.04 of its potential returns per unit of risk. Lmp Capital And is currently generating about -0.07 per unit of risk. If you would invest  486.00  in Oxford Lane Capital on December 26, 2024 and sell it today you would lose (20.00) from holding Oxford Lane Capital or give up 4.12% of portfolio value over 90 days.

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

Oxford Lane Capital  vs.  Lmp Capital And

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.

Lmp Capital And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lmp Capital And has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound fundamental indicators, Lmp Capital 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 Lmp Capital

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

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