Correlation Between Oppenheimer Cap and Oppenheimer Main

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

Diversification Opportunities for Oppenheimer Cap and Oppenheimer Main

0.62

Correlation Coefficient

Oppenheimer Cap  Oppenheimer Main

Poor diversification

The 3 months correlation between Oppenheimer and Oppenheimer is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Cap Apprec 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 Cap 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 Cap Apprec 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 Cap i.e., Oppenheimer Cap and Oppenheimer Main go up and down completely randomly.

Pair Corralation between Oppenheimer Cap and Oppenheimer Main

Assuming the 90 days horizon Oppenheimer Cap Apprec is expected to generate 0.93 times more return on investment than Oppenheimer Main. However, Oppenheimer Cap Apprec is 1.07 times less risky than Oppenheimer Main. It trades about 0.11 of its potential returns per unit of risk. Oppenheimer Main Street is currently generating about 0.04 per unit of risk. If you would invest  4,190  in Oppenheimer Cap Apprec on October 1, 2024 and sell it today you would earn a total of  3,269  from holding Oppenheimer Cap Apprec or generate 78.02% return on investment over 90 days.

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

Oppenheimer Cap Apprec  vs.  Oppenheimer Main Street

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.

Oppenheimer Main Street

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Main Street has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Cap and Oppenheimer Main

The main advantage of trading using opposite Oppenheimer Cap and Oppenheimer Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Cap 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 Cap Apprec 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.