Correlation Between Amazon and Oppenheimer Global
Can any of the company-specific risk be diversified away by investing in both Amazon and Oppenheimer Global 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 Amazon and Oppenheimer Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Oppenheimer Global Multi Asset, you can compare the effects of market volatilities on Amazon and Oppenheimer Global 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 Amazon with a short position of Oppenheimer Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Oppenheimer Global.
Diversification Opportunities for Amazon and Oppenheimer Global
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amazon and Oppenheimer is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Oppenheimer Global Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Global and Amazon 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 Amazon Inc are associated (or correlated) with Oppenheimer Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Global has no effect on the direction of Amazon i.e., Amazon and Oppenheimer Global go up and down completely randomly.
Pair Corralation between Amazon and Oppenheimer Global
Given the investment horizon of 90 days Amazon Inc is expected to generate 2.41 times more return on investment than Oppenheimer Global. However, Amazon is 2.41 times more volatile than Oppenheimer Global Multi Asset. It trades about 0.1 of its potential returns per unit of risk. Oppenheimer Global Multi Asset is currently generating about 0.06 per unit of risk. If you would invest 12,948 in Amazon Inc on September 4, 2024 and sell it today you would earn a total of 8,123 from holding Amazon Inc or generate 62.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Amazon Inc vs. Oppenheimer Global Multi Asset
Performance |
| Timeline |
| Amazon Inc |
| Oppenheimer Global |
Amazon and Oppenheimer Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Oppenheimer Global
The main advantage of trading using opposite Amazon and Oppenheimer Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon position performs unexpectedly, Oppenheimer Global 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 Global will offset losses from the drop in Oppenheimer Global's long position.The idea behind Amazon Inc and Oppenheimer Global Multi Asset 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.| Oppenheimer Global vs. Icon Natural Resources | Oppenheimer Global vs. Energy Basic Materials | Oppenheimer Global vs. Clearbridge Energy Mlp | Oppenheimer Global vs. Firsthand Alternative Energy |
Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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