Correlation Between Oppenheimer International and Oppenheimer Glabal

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

Diversification Opportunities for Oppenheimer International and Oppenheimer Glabal

0.8

Correlation Coefficient

Oppenheimer International  Oppenheimer Glabal

Very poor diversification

The 3 months correlation between Oppenheimer and Oppenheimer is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Smal and Oppenheimer Glabal A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Glabal 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 Glabal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Glabal has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Oppenheimer Glabal go up and down completely randomly.

Pair Corralation between Oppenheimer International and Oppenheimer Glabal

Assuming the 90 days horizon Oppenheimer International Small is expected to under-perform the Oppenheimer Glabal. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oppenheimer International Small is 1.09 times less risky than Oppenheimer Glabal. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Oppenheimer Glabal A is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  10,420  in Oppenheimer Glabal A on September 23, 2024 and sell it today you would lose (999.00) from holding Oppenheimer Glabal A or give up 9.59% of portfolio value over 90 days.

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

Oppenheimer International Smal  vs.  Oppenheimer Glabal A

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 Glabal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Glabal A 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.

Pair Trading with Oppenheimer International and Oppenheimer Glabal

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

The idea behind Oppenheimer International Small and Oppenheimer Glabal A 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.