Correlation Between Oxford Lane and Pimco Corporate

Can any of the company-specific risk be diversified away by investing in both Oxford Lane and Pimco Corporate 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 Pimco Corporate 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 Pimco Corporate Income, you can compare the effects of market volatilities on Oxford Lane and Pimco Corporate 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 Pimco Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oxford Lane and Pimco Corporate.

Diversification Opportunities for Oxford Lane and Pimco Corporate

0.16

Correlation Coefficient

Oxford Lane  Pimco Corporate

Average diversification

The 3 months correlation between Oxford and Pimco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Pimco Corporate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Corporate Income 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 Pimco Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Corporate Income has no effect on the direction of Oxford Lane i.e., Oxford Lane and Pimco Corporate go up and down completely randomly.

Pair Corralation between Oxford Lane and Pimco Corporate

Given the investment horizon of 90 days Oxford Lane is expected to generate 1.05 times less return on investment than Pimco Corporate. In addition to that, Oxford Lane is 1.42 times more volatile than Pimco Corporate Income. It trades about 0.02 of its total potential returns per unit of risk. Pimco Corporate Income is currently generating about 0.03 per unit of volatility. If you would invest  1,209  in Pimco Corporate Income on February 24, 2024 and sell it today you would earn a total of  217.00  from holding Pimco Corporate Income or generate 17.95% return on investment over 90 days.

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

Oxford Lane Capital  vs.  Pimco Corporate Income

Oxford Lane Capital

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Lane Capital are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Oxford Lane may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pimco Corporate Income

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Corporate Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pimco Corporate is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oxford Lane and Pimco Corporate

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

The idea behind Oxford Lane Capital and Pimco Corporate Income 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.