Correlation Between Oxford Lane and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Cornerstone Strategic 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 Cornerstone Strategic 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 Cornerstone Strategic Return, you can compare the effects of market volatilities on Oxford Lane and Cornerstone Strategic 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 Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Cornerstone Strategic.
Diversification Opportunities for Oxford Lane and Cornerstone Strategic
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oxford and Cornerstone is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Oxford Lane i.e., Oxford Lane and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Oxford Lane and Cornerstone Strategic
Given the investment horizon of 90 days Oxford Lane is expected to generate 1.2 times less return on investment than Cornerstone Strategic. In addition to that, Oxford Lane is 1.07 times more volatile than Cornerstone Strategic Return. It trades about 0.04 of its total potential returns per unit of risk. Cornerstone Strategic Return is currently generating about 0.06 per unit of volatility. If you would invest 542.00 in Cornerstone Strategic Return on March 8, 2024 and sell it today you would earn a total of 238.00 from holding Cornerstone Strategic Return or generate 43.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Oxford Lane Capital vs. Cornerstone Strategic Return
Performance |
Timeline |
Oxford Lane Capital |
Cornerstone Strategic |
Oxford Lane and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oxford Lane and Cornerstone Strategic
The main advantage of trading using opposite Oxford Lane and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oxford Lane position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic's long position.Oxford Lane vs. Morningstar Unconstrained Allocation | Oxford Lane vs. First Physicians Capital | Oxford Lane vs. SEI Investments | Oxford Lane vs. Kosmos Energy |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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