Correlation Between Adams Natural and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both Adams Natural and Oxford Lane 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 Adams Natural and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Oxford Lane Capital, you can compare the effects of market volatilities on Adams Natural and Oxford Lane 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 Adams Natural with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Oxford Lane.
Diversification Opportunities for Adams Natural and Oxford Lane
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adams and Oxford is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and Oxford Lane Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Lane Capital and Adams Natural 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 Adams Natural Resources are associated (or correlated) with Oxford Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Lane Capital has no effect on the direction of Adams Natural i.e., Adams Natural and Oxford Lane go up and down completely randomly.
Pair Corralation between Adams Natural and Oxford Lane
Considering the 90-day investment horizon Adams Natural Resources is expected to generate 1.7 times more return on investment than Oxford Lane. However, Adams Natural is 1.7 times more volatile than Oxford Lane Capital. It trades about 0.14 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.08 per unit of risk. If you would invest 2,170 in Adams Natural Resources on December 2, 2024 and sell it today you would earn a total of 63.00 from holding Adams Natural Resources or generate 2.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Adams Natural Resources vs. Oxford Lane Capital
Performance |
Timeline |
Adams Natural Resources |
Oxford Lane Capital |
Adams Natural and Oxford Lane Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adams Natural and Oxford Lane
The main advantage of trading using opposite Adams Natural and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural position performs unexpectedly, Oxford Lane 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 Oxford Lane will offset losses from the drop in Oxford Lane's long position.Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
Oxford Lane vs. Capital Southwest | Oxford Lane vs. XAI Octagon Floating | Oxford Lane vs. Cornerstone Strategic Return | Oxford Lane vs. Cornerstone Strategic Value |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |