Correlation Between Oppenheimer Intl and Oppenheimer Cap

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

By analyzing existing cross correlation between Oppenheimer Intl Small and Oppenheimer Cap Apprec, you can compare the effects of market volatilities on Oppenheimer Intl and Oppenheimer Cap 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 Intl with a short position of Oppenheimer Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Intl and Oppenheimer Cap.

Diversification Opportunities for Oppenheimer Intl and Oppenheimer Cap

-0.49

Correlation Coefficient

Oppenheimer Intl  Oppenheimer Cap

Very good diversification

The 3 months correlation between Oppenheimer and Oppenheimer is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Intl Small and Oppenheimer Cap Apprec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Cap Apprec and Oppenheimer Intl 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 Intl Small are associated (or correlated) with Oppenheimer Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Cap Apprec has no effect on the direction of Oppenheimer Intl i.e., Oppenheimer Intl and Oppenheimer Cap go up and down completely randomly.

Pair Corralation between Oppenheimer Intl and Oppenheimer Cap

Assuming the 90 days horizon Oppenheimer Intl Small is expected to under-perform the Oppenheimer Cap. In addition to that, Oppenheimer Intl is 1.78 times more volatile than Oppenheimer Cap Apprec. It trades about -0.27 of its total potential returns per unit of risk. Oppenheimer Cap Apprec is currently generating about -0.08 per unit of volatility. If you would invest  7,647  in Oppenheimer Cap Apprec on October 1, 2024 and sell it today you would lose (188.00) from holding Oppenheimer Cap Apprec or give up 2.46% of portfolio value over 90 days.

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

Oppenheimer Intl Small  vs.  Oppenheimer Cap Apprec

Oppenheimer Intl Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Intl 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 basic 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 Cap Apprec

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Cap Apprec are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer Cap 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 Intl and Oppenheimer Cap

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

The idea behind Oppenheimer Intl Small and Oppenheimer Cap Apprec 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.