Correlation Between Oxford Lane and SuRo Capital

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

Diversification Opportunities for Oxford Lane and SuRo Capital

0.53

Correlation Coefficient

Oxford Lane  SuRo Capital

Very weak diversification

The 3 months correlation between Oxford and SuRo is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital Corp 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 SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Oxford Lane i.e., Oxford Lane and SuRo Capital go up and down completely randomly.

Pair Corralation between Oxford Lane and SuRo Capital

Assuming the 90 days horizon Oxford Lane is expected to generate 3.89 times less return on investment than SuRo Capital. But when comparing it to its historical volatility, Oxford Lane Capital is 3.59 times less risky than SuRo Capital. It trades about 0.12 of its potential returns per unit of risk. SuRo Capital Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,438  in SuRo Capital Corp on October 13, 2024 and sell it today you would earn a total of  37.70  from holding SuRo Capital Corp or generate 1.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Oxford Lane Capital  vs.  SuRo Capital Corp

Oxford Lane Capital

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Oxford Lane is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SuRo Capital Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SuRo Capital Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, SuRo Capital is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Oxford Lane and SuRo Capital

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

The idea behind Oxford Lane Capital and SuRo Capital Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.