Correlation Between Oppenheimer International and Invesco Senior

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Can any of the company-specific risk be diversified away by investing in both Oppenheimer International and Invesco Senior 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 International and Invesco Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer International Small and Invesco Senior Loan, you can compare the effects of market volatilities on Oppenheimer International and Invesco Senior 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 International with a short position of Invesco Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and Invesco Senior.

Diversification Opportunities for Oppenheimer International and Invesco Senior

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Oppenheimer and Invesco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Smal and Invesco Senior Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Senior Loan and Oppenheimer International 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 International Small are associated (or correlated) with Invesco Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Senior Loan has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Invesco Senior go up and down completely randomly.

Pair Corralation between Oppenheimer International and Invesco Senior

Assuming the 90 days horizon Oppenheimer International Small is expected to under-perform the Invesco Senior. In addition to that, Oppenheimer International is 4.77 times more volatile than Invesco Senior Loan. It trades about -0.12 of its total potential returns per unit of risk. Invesco Senior Loan is currently generating about 0.07 per unit of volatility. If you would invest  570.00  in Invesco Senior Loan on August 31, 2024 and sell it today you would earn a total of  4.00  from holding Invesco Senior Loan or generate 0.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Oppenheimer International Smal  vs.  Invesco Senior Loan

 Performance 
       Timeline  
Oppenheimer International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Oppenheimer International Small 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.
Invesco Senior Loan 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Invesco Senior Loan are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Invesco Senior is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer International and Invesco Senior Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oppenheimer International and Invesco Senior

The main advantage of trading using opposite Oppenheimer International and Invesco Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer International position performs unexpectedly, Invesco Senior 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 Invesco Senior will offset losses from the drop in Invesco Senior's long position.
The idea behind Oppenheimer International Small and Invesco Senior Loan 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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