Correlation Between Oppenheimer International and Oppenheimer Main

Can any of the company-specific risk be diversified away by investing in both Oppenheimer International and Oppenheimer Main 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 Oppenheimer Main 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 Oppenheimer Main Street, you can compare the effects of market volatilities on Oppenheimer International and Oppenheimer Main 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 Oppenheimer Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and Oppenheimer Main.

Diversification Opportunities for Oppenheimer International and Oppenheimer Main

-0.72

Correlation Coefficient

Oppenheimer International  Oppenheimer Main

Pay attention - limited upside

The 3 months correlation between Oppenheimer and Oppenheimer is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Smal and Oppenheimer Main Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Main Street 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 Oppenheimer Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Main Street has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Oppenheimer Main go up and down completely randomly.

Pair Corralation between Oppenheimer International and Oppenheimer Main

Assuming the 90 days horizon Oppenheimer International Small is expected to under-perform the Oppenheimer Main. In addition to that, Oppenheimer International is 1.59 times more volatile than Oppenheimer Main Street. It trades about -0.18 of its total potential returns per unit of risk. Oppenheimer Main Street is currently generating about 0.02 per unit of volatility. If you would invest  5,213  in Oppenheimer Main Street on September 18, 2024 and sell it today you would earn a total of  59.00  from holding Oppenheimer Main Street or generate 1.13% return on investment over 90 days.

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

Oppenheimer International Smal  vs.  Oppenheimer Main Street

Oppenheimer International

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Oppenheimer Main Street

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Main Street are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Oppenheimer Main 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 International and Oppenheimer Main

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

The idea behind Oppenheimer International Small and Oppenheimer Main Street 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.