Correlation Between Oxford Square and National Rural

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

By analyzing existing cross correlation between Oxford Square Capital and National Rural Utilities, you can compare the effects of market volatilities on Oxford Square and National Rural 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 Square with a short position of National Rural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Square and National Rural.

Diversification Opportunities for Oxford Square and National Rural

-0.49

Correlation Coefficient

Oxford Square  National Rural

Very good diversification

The 3 months correlation between Oxford and National is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Square Capital and National Rural Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Rural Utilities and Oxford Square 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 Square Capital are associated (or correlated) with National Rural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Rural Utilities has no effect on the direction of Oxford Square i.e., Oxford Square and National Rural go up and down completely randomly.

Pair Corralation between Oxford Square and National Rural

Assuming the 90 days horizon Oxford Square Capital is expected to generate 0.91 times more return on investment than National Rural. However, Oxford Square Capital is 1.1 times less risky than National Rural. It trades about 0.07 of its potential returns per unit of risk. National Rural Utilities is currently generating about 0.04 per unit of risk. If you would invest  2,016  in Oxford Square Capital on September 12, 2024 and sell it today you would earn a total of  328.00  from holding Oxford Square Capital or generate 16.27% return on investment over 90 days.

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

Oxford Square Capital  vs.  National Rural Utilities

Oxford Square Capital

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Square Capital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Oxford Square is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

National Rural Utilities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Rural Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, National Rural is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Oxford Square and National Rural

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

The idea behind Oxford Square Capital and National Rural Utilities 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.

Check out your portfolio center.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.