Correlation Between Oppenheimer Moderate and Oppenheimer Intl

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

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

Diversification Opportunities for Oppenheimer Moderate and Oppenheimer Intl

0.06

Correlation Coefficient

Oppenheimer Moderate  Oppenheimer Intl

Significant diversification

The 3 months correlation between Oppenheimer and Oppenheimer is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Moderate Invstr and Oppenheimer Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Intl Small and Oppenheimer Moderate 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 Moderate Invstr are associated (or correlated) with Oppenheimer Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Intl Small has no effect on the direction of Oppenheimer Moderate i.e., Oppenheimer Moderate and Oppenheimer Intl go up and down completely randomly.

Pair Corralation between Oppenheimer Moderate and Oppenheimer Intl

Assuming the 90 days horizon Oppenheimer Moderate Invstr is expected to generate 0.46 times more return on investment than Oppenheimer Intl. However, Oppenheimer Moderate Invstr is 2.19 times less risky than Oppenheimer Intl. It trades about -0.09 of its potential returns per unit of risk. Oppenheimer Intl Small is currently generating about -0.21 per unit of risk. If you would invest  1,171  in Oppenheimer Moderate Invstr on September 23, 2024 and sell it today you would lose (46.00) from holding Oppenheimer Moderate Invstr or give up 3.93% of portfolio value over 90 days.

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

Oppenheimer Moderate Invstr  vs.  Oppenheimer Intl Small

Oppenheimer Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Moderate Invstr has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Oppenheimer Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Oppenheimer Moderate and Oppenheimer Intl

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

The idea behind Oppenheimer Moderate Invstr and Oppenheimer Intl Small 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.