Correlation Between Oxford Lane and Munivest Fund

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

Diversification Opportunities for Oxford Lane and Munivest Fund

-0.35

Correlation Coefficient

Oxford Lane  Munivest Fund

Very good diversification

The 3 months correlation between Oxford and Munivest is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund 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 Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of Oxford Lane i.e., Oxford Lane and Munivest Fund go up and down completely randomly.

Pair Corralation between Oxford Lane and Munivest Fund

Assuming the 90 days horizon Oxford Lane Capital is expected to generate 0.7 times more return on investment than Munivest Fund. However, Oxford Lane Capital is 1.42 times less risky than Munivest Fund. It trades about -0.12 of its potential returns per unit of risk. Munivest Fund is currently generating about -0.26 per unit of risk. If you would invest  2,307  in Oxford Lane Capital on October 5, 2024 and sell it today you would lose (28.00) from holding Oxford Lane Capital or give up 1.21% of portfolio value over 90 days.

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

Oxford Lane Capital  vs.  Munivest Fund

Oxford Lane Capital

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Oxford Lane is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Munivest Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Munivest Fund has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Munivest Fund is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Oxford Lane and Munivest Fund

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

The idea behind Oxford Lane Capital and Munivest Fund 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..