Correlation Between Oppenheimer Disciplined and Oppenheimer Strategic

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

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

Diversification Opportunities for Oppenheimer Disciplined and Oppenheimer Strategic

-0.08

Correlation Coefficient

Oppenheimer Disciplined  Oppenheimer Strategic

Good diversification

The 3 months correlation between Oppenheimer and Oppenheimer is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Disciplined Value and Oppenheimer Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Strategic and Oppenheimer Disciplined 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 Oppenheimer Disciplined Value are associated (or correlated) with Oppenheimer Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Strategic has no effect on the direction of Oppenheimer Disciplined i.e., Oppenheimer Disciplined and Oppenheimer Strategic go up and down completely randomly.

Pair Corralation between Oppenheimer Disciplined and Oppenheimer Strategic

Assuming the 90 days horizon Oppenheimer Disciplined Value is expected to under-perform the Oppenheimer Strategic. In addition to that, Oppenheimer Disciplined is 5.34 times more volatile than Oppenheimer Strategic Income. It trades about -0.1 of its total potential returns per unit of risk. Oppenheimer Strategic Income is currently generating about -0.1 per unit of volatility. If you would invest  315.00  in Oppenheimer Strategic Income on September 23, 2024 and sell it today you would lose (7.00) from holding Oppenheimer Strategic Income or give up 2.22% of portfolio value over 90 days.

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

Oppenheimer Disciplined Value  vs.  Oppenheimer Strategic Income

Oppenheimer Disciplined

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Disciplined Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Oppenheimer Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Oppenheimer Disciplined and Oppenheimer Strategic

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

The idea behind Oppenheimer Disciplined Value and Oppenheimer Strategic Income 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.