Correlation Between Invesco Emerging and Oppenheimer Global

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

By analyzing existing cross correlation between Invesco Emerging Markets and Oppenheimer Global Growth, you can compare the effects of market volatilities on Invesco Emerging and Oppenheimer Global 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 Invesco Emerging with a short position of Oppenheimer Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Emerging and Oppenheimer Global.

Diversification Opportunities for Invesco Emerging and Oppenheimer Global

0.66

Correlation Coefficient

Invesco Emerging  Oppenheimer Global

Poor diversification

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

Pair Corralation between Invesco Emerging and Oppenheimer Global

Assuming the 90 days horizon Invesco Emerging Markets is expected to under-perform the Oppenheimer Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Invesco Emerging Markets is 1.97 times less risky than Oppenheimer Global. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Oppenheimer Global Growth is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  5,057  in Oppenheimer Global Growth on September 22, 2024 and sell it today you would lose (335.00) from holding Oppenheimer Global Growth or give up 6.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Invesco Emerging Markets  vs.  Oppenheimer Global Growth

Invesco Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oppenheimer Global Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Invesco Emerging and Oppenheimer Global

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

The idea behind Invesco Emerging Markets and Oppenheimer Global Growth 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 Global Correlations module to find global opportunities by holding instruments from different markets.