Correlation Between Oxford Lane and Apple

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

Diversification Opportunities for Oxford Lane and Apple

0.11

Correlation Coefficient

Oxford Lane  Apple

Average diversification

The 3 months correlation between Oxford and Apple is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Oxford Lane i.e., Oxford Lane and Apple go up and down completely randomly.

Pair Corralation between Oxford Lane and Apple

Assuming the 90 days horizon Oxford Lane is expected to generate 3.33 times less return on investment than Apple. But when comparing it to its historical volatility, Oxford Lane Capital is 2.16 times less risky than Apple. It trades about 0.06 of its potential returns per unit of risk. Apple Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  13,508  in Apple Inc on September 5, 2024 and sell it today you would earn a total of  10,757  from holding Apple Inc or generate 79.63% 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.  Apple Inc

Oxford Lane Capital

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Oxford Lane is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Apple Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Oxford Lane and Apple

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

The idea behind Oxford Lane Capital and Apple Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.