Correlation Between Oxford Lane and IShares Equity

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

Diversification Opportunities for Oxford Lane and IShares Equity

-0.76

Correlation Coefficient

Oxford Lane  IShares Equity

Pay attention - limited upside

The 3 months correlation between Oxford and IShares is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Oxford Lane Capital and iShares Equity Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Equity Factor 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 IShares Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Equity Factor has no effect on the direction of Oxford Lane i.e., Oxford Lane and IShares Equity go up and down completely randomly.

Pair Corralation between Oxford Lane and IShares Equity

Given the investment horizon of 90 days Oxford Lane Capital is expected to under-perform the IShares Equity. In addition to that, Oxford Lane is 2.34 times more volatile than iShares Equity Factor. It trades about -0.22 of its total potential returns per unit of risk. iShares Equity Factor is currently generating about 0.23 per unit of volatility. If you would invest  5,829  in iShares Equity Factor on May 7, 2025 and sell it today you would earn a total of  684.00  from holding iShares Equity Factor or generate 11.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Oxford Lane Capital  vs.  iShares Equity Factor

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.

iShares Equity Factor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Equity Factor are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, IShares Equity may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Oxford Lane and IShares Equity

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

The idea behind Oxford Lane Capital and iShares Equity Factor 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.