Correlation Between Ab Bond and Oppenheimer International

Can any of the company-specific risk be diversified away by investing in both Ab Bond and Oppenheimer International 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 Ab Bond and Oppenheimer International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Bond Inflation and Oppenheimer International Bond, you can compare the effects of market volatilities on Ab Bond and Oppenheimer International 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 Ab Bond with a short position of Oppenheimer International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Oppenheimer International.

Diversification Opportunities for Ab Bond and Oppenheimer International

0.66

Correlation Coefficient

Ab Bond  Oppenheimer International

Poor diversification

The 3 months correlation between ANBIX and Oppenheimer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Oppenheimer International Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer International and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Oppenheimer International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer International has no effect on the direction of Ab Bond i.e., Ab Bond and Oppenheimer International go up and down completely randomly.

Pair Corralation between Ab Bond and Oppenheimer International

Assuming the 90 days horizon Ab Bond Inflation is expected to generate 0.49 times more return on investment than Oppenheimer International. However, Ab Bond Inflation is 2.06 times less risky than Oppenheimer International. It trades about -0.2 of its potential returns per unit of risk. Oppenheimer International Bond is currently generating about -0.12 per unit of risk. If you would invest  1,040  in Ab Bond Inflation on September 29, 2024 and sell it today you would lose (25.00) from holding Ab Bond Inflation or give up 2.4% of portfolio value over 90 days.

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

Ab Bond Inflation  vs.  Oppenheimer International Bond

Ab Bond Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Bond Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Ab Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer International Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Oppenheimer International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Bond and Oppenheimer International

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

The idea behind Ab Bond Inflation and Oppenheimer International Bond 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.