Correlation Between Oxford Square and Aquagold International

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

Diversification Opportunities for Oxford Square and Aquagold International

-0.28

Correlation Coefficient

Oxford Square  Aquagold International

Very good diversification

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

Pair Corralation between Oxford Square and Aquagold International

Assuming the 90 days horizon Oxford Square Capital is expected to generate 0.02 times more return on investment than Aquagold International. However, Oxford Square Capital is 64.1 times less risky than Aquagold International. It trades about 0.01 of its potential returns per unit of risk. Aquagold International is currently generating about -0.22 per unit of risk. If you would invest  2,479  in Oxford Square Capital on October 6, 2024 and sell it today you would earn a total of  2.00  from holding Oxford Square Capital or generate 0.08% return on investment over 90 days.

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

Oxford Square Capital  vs.  Aquagold International

Oxford Square Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Square Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Oxford Square is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Oxford Square and Aquagold International

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

The idea behind Oxford Square Capital and Aquagold International 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.