Correlation Between Oxford Lane and Keyence

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

Diversification Opportunities for Oxford Lane and Keyence

0.77

Correlation Coefficient

Oxford Lane  Keyence

Poor diversification

The 3 months correlation between Oxford and Keyence is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence 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 Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of Oxford Lane i.e., Oxford Lane and Keyence go up and down completely randomly.

Pair Corralation between Oxford Lane and Keyence

Given the investment horizon of 90 days Oxford Lane Capital is expected to under-perform the Keyence. But the stock apears to be less risky and, when comparing its historical volatility, Oxford Lane Capital is 1.63 times less risky than Keyence. The stock trades about -0.2 of its potential returns per unit of risk. The Keyence is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  44,800  in Keyence on May 5, 2025 and sell it today you would lose (7,170) from holding Keyence or give up 16.0% of portfolio value over 90 days.

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

Oxford Lane Capital  vs.  Keyence

Oxford Lane Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oxford Lane Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Keyence

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Oxford Lane and Keyence

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

The idea behind Oxford Lane Capital and Keyence 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.