Correlation Between Oppenheimer Value and Alliancebernstein

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

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

Diversification Opportunities for Oppenheimer Value and Alliancebernstein

0.48

Correlation Coefficient

Oppenheimer Value  Alliancebernstein

Very weak diversification

The 3 months correlation between Oppenheimer and Alliancebernstein is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Value Fd and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Oppenheimer Value 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 Value Fd are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Oppenheimer Value i.e., Oppenheimer Value and Alliancebernstein go up and down completely randomly.

Pair Corralation between Oppenheimer Value and Alliancebernstein

Assuming the 90 days horizon Oppenheimer Value Fd is expected to under-perform the Alliancebernstein. In addition to that, Oppenheimer Value is 7.01 times more volatile than Alliancebernstein Global High. It trades about -0.3 of its total potential returns per unit of risk. Alliancebernstein Global High is currently generating about -0.35 per unit of volatility. If you would invest  1,093  in Alliancebernstein Global High on October 1, 2024 and sell it today you would lose (32.00) from holding Alliancebernstein Global High or give up 2.93% of portfolio value over 90 days.

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

Oppenheimer Value Fd  vs.  Alliancebernstein Global High

Oppenheimer Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Value Fd 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.

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Global High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Alliancebernstein is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Oppenheimer Value and Alliancebernstein

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

The idea behind Oppenheimer Value Fd and Alliancebernstein Global High 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.

Check out your portfolio center.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.