Correlation Between AMTD IDEA and Oxford Lane

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

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

Diversification Opportunities for AMTD IDEA and Oxford Lane

0.11

Correlation Coefficient

AMTD IDEA  Oxford Lane

Average diversification

The 3 months correlation between AMTD and Oxford is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding AMTD IDEA Group 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 AMTD IDEA 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 AMTD IDEA Group 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 AMTD IDEA i.e., AMTD IDEA and Oxford Lane go up and down completely randomly.

Pair Corralation between AMTD IDEA and Oxford Lane

Given the investment horizon of 90 days AMTD IDEA Group is expected to under-perform the Oxford Lane. In addition to that, AMTD IDEA is 2.03 times more volatile than Oxford Lane Capital. It trades about -0.03 of its total potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.31 per unit of volatility. If you would invest  509.00  in Oxford Lane Capital on March 7, 2024 and sell it today you would earn a total of  38.00  from holding Oxford Lane Capital or generate 7.47% return on investment over 90 days.

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

AMTD IDEA Group  vs.  Oxford Lane Capital

AMTD IDEA Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oxford Lane Capital

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent essential indicators, Oxford Lane may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with AMTD IDEA and Oxford Lane

The main advantage of trading using opposite AMTD IDEA and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMTD IDEA 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.

The idea behind AMTD IDEA Group and Oxford Lane 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.