Correlation Between Oxford Lane and Nuveen Variable

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

Diversification Opportunities for Oxford Lane and Nuveen Variable

0.28

Correlation Coefficient

Oxford Lane  Nuveen Variable

Modest diversification

The 3 months correlation between Oxford and Nuveen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Nuveen Variable Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Variable Rate 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 Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Variable Rate has no effect on the direction of Oxford Lane i.e., Oxford Lane and Nuveen Variable go up and down completely randomly.

Pair Corralation between Oxford Lane and Nuveen Variable

Assuming the 90 days horizon Oxford Lane is expected to generate 27.58 times less return on investment than Nuveen Variable. But when comparing it to its historical volatility, Oxford Lane Capital is 1.63 times less risky than Nuveen Variable. It trades about 0.0 of its potential returns per unit of risk. Nuveen Variable Rate is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,858  in Nuveen Variable Rate on October 7, 2024 and sell it today you would earn a total of  23.00  from holding Nuveen Variable Rate or generate 1.24% 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 Variable Rate

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.

Nuveen Variable Rate

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Variable Rate are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Nuveen Variable is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oxford Lane and Nuveen Variable

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

The idea behind Oxford Lane Capital and Nuveen Variable Rate 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..