Correlation Between Oxford Industries and Neo Concept

Can any of the company-specific risk be diversified away by investing in both Oxford Industries and Neo Concept 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 Industries and Neo Concept into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oxford Industries and Neo Concept International Group, you can compare the effects of market volatilities on Oxford Industries and Neo Concept 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 Industries with a short position of Neo Concept. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Industries and Neo Concept.

Diversification Opportunities for Oxford Industries and Neo Concept

0.84

Correlation Coefficient

Oxford Industries  Neo Concept

Very poor diversification

The 3 months correlation between Oxford and Neo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Industries and Neo Concept International Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Concept Internat and Oxford Industries 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 Industries are associated (or correlated) with Neo Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Concept Internat has no effect on the direction of Oxford Industries i.e., Oxford Industries and Neo Concept go up and down completely randomly.

Pair Corralation between Oxford Industries and Neo Concept

Considering the 90-day investment horizon Oxford Industries is expected to under-perform the Neo Concept. But the stock apears to be less risky and, when comparing its historical volatility, Oxford Industries is 2.19 times less risky than Neo Concept. The stock trades about -0.16 of its potential returns per unit of risk. The Neo Concept International Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Neo Concept International Group on December 19, 2024 and sell it today you would lose (8.00) from holding Neo Concept International Group or give up 17.02% of portfolio value over 90 days.

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

Oxford Industries  vs.  Neo Concept International Grou

Oxford Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oxford Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Neo Concept Internat

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neo Concept International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Oxford Industries and Neo Concept

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

The idea behind Oxford Industries and Neo Concept International Group 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.