Correlation Between Oxford Lane and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Blackrock Muniyield 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 Lane and Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oxford Lane Capital and Blackrock Muniyield Quality, you can compare the effects of market volatilities on Oxford Lane and Blackrock Muniyield 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 Lane with a short position of Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Blackrock Muniyield.
Diversification Opportunities for Oxford Lane and Blackrock Muniyield
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oxford and Blackrock is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield and Oxford Lane 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 Lane Capital are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of Oxford Lane i.e., Oxford Lane and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between Oxford Lane and Blackrock Muniyield
Assuming the 90 days horizon Oxford Lane Capital is expected to generate 1.04 times more return on investment than Blackrock Muniyield. However, Oxford Lane is 1.04 times more volatile than Blackrock Muniyield Quality. It trades about 0.08 of its potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about -0.21 per unit of risk. If you would invest 2,203 in Oxford Lane Capital on February 3, 2024 and sell it today you would earn a total of 22.00 from holding Oxford Lane Capital or generate 1.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Oxford Lane Capital vs. Blackrock Muniyield Quality
Performance |
Timeline |
Oxford Lane Capital |
Blackrock Muniyield |
Oxford Lane and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oxford Lane and Blackrock Muniyield
The main advantage of trading using opposite Oxford Lane and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, Blackrock Muniyield 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 Blackrock Muniyield will offset losses from the drop in Blackrock Muniyield's long position.Oxford Lane vs. Virtus AllianzGI Convertible | Oxford Lane vs. The Gabelli Equity | Oxford Lane vs. The Gabelli Utility | Oxford Lane vs. The Gabelli Multimedia |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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