Correlation Between Oxford Lane and Linamar

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

Diversification Opportunities for Oxford Lane and Linamar

-0.68

Correlation Coefficient

Oxford Lane  Linamar

Excellent diversification

The 3 months correlation between Oxford and Linamar is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar 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 Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of Oxford Lane i.e., Oxford Lane and Linamar go up and down completely randomly.

Pair Corralation between Oxford Lane and Linamar

Given the investment horizon of 90 days Oxford Lane Capital is expected to under-perform the Linamar. In addition to that, Oxford Lane is 1.01 times more volatile than Linamar. It trades about -0.2 of its total potential returns per unit of risk. Linamar is currently generating about 0.24 per unit of volatility. If you would invest  3,722  in Linamar on May 5, 2025 and sell it today you would earn a total of  1,129  from holding Linamar or generate 30.33% return on investment over 90 days.

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

Oxford Lane Capital  vs.  Linamar

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.

Linamar

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Linamar are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Linamar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oxford Lane and Linamar

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

The idea behind Oxford Lane Capital and Linamar 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.