Correlation Between Rivernorth Opportunities and Oxford Square

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

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

Diversification Opportunities for Rivernorth Opportunities and Oxford Square

-0.05

Correlation Coefficient

Rivernorth Opportunities  Oxford Square

Good diversification

The 3 months correlation between Rivernorth and Oxford is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Rivernorth Opportunities and Oxford Square Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Square Capital and Rivernorth Opportunities 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 Rivernorth Opportunities are associated (or correlated) with Oxford Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Square Capital has no effect on the direction of Rivernorth Opportunities i.e., Rivernorth Opportunities and Oxford Square go up and down completely randomly.

Pair Corralation between Rivernorth Opportunities and Oxford Square

Considering the 90-day investment horizon Rivernorth Opportunities is expected to generate 0.62 times more return on investment than Oxford Square. However, Rivernorth Opportunities is 1.61 times less risky than Oxford Square. It trades about 0.15 of its potential returns per unit of risk. Oxford Square Capital is currently generating about -0.09 per unit of risk. If you would invest  1,198  in Rivernorth Opportunities on September 4, 2024 and sell it today you would earn a total of  68.00  from holding Rivernorth Opportunities or generate 5.68% return on investment over 90 days.

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

Rivernorth Opportunities  vs.  Oxford Square Capital

Rivernorth Opportunities

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorth Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable forward indicators, Rivernorth Opportunities is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Oxford Square Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oxford Square Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Oxford Square is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Rivernorth Opportunities and Oxford Square

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

The idea behind Rivernorth Opportunities and Oxford Square Capital 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.