Correlation Between Trinity Capital and Oxford Lane

Can any of the company-specific risk be diversified away by investing in both Trinity Capital and Oxford Lane 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 Trinity Capital and Oxford Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trinity Capital and Oxford Lane Capital, you can compare the effects of market volatilities on Trinity Capital and Oxford Lane 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 Trinity Capital with a short position of Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trinity Capital and Oxford Lane.

Diversification Opportunities for Trinity Capital and Oxford Lane

-0.62

Correlation Coefficient

Trinity Capital  Oxford Lane

Excellent diversification

The 3 months correlation between Trinity and Oxford is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Trinity Capital and Oxford Lane Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Lane Capital and Trinity Capital 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 Trinity Capital are associated (or correlated) with Oxford Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Lane Capital has no effect on the direction of Trinity Capital i.e., Trinity Capital and Oxford Lane go up and down completely randomly.

Pair Corralation between Trinity Capital and Oxford Lane

Given the investment horizon of 90 days Trinity Capital is expected to generate 0.57 times more return on investment than Oxford Lane. However, Trinity Capital is 1.77 times less risky than Oxford Lane. It trades about 0.15 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about -0.2 per unit of risk. If you would invest  1,360  in Trinity Capital on May 6, 2025 and sell it today you would earn a total of  131.00  from holding Trinity Capital or generate 9.63% return on investment over 90 days.

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

Trinity Capital  vs.  Oxford Lane Capital

Trinity Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trinity Capital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Trinity Capital may actually be approaching a critical reversion point that can send shares even higher in September 2025.

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.

Pair Trading with Trinity Capital and Oxford Lane

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

The idea behind Trinity Capital and Oxford Lane Capital 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.