Correlation Between Capital World and Oppenheimer Global
Can any of the company-specific risk be diversified away by investing in both Capital World 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 Capital World and Oppenheimer Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Bond and Oppenheimer Global Strtgc, you can compare the effects of market volatilities on Capital World 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 Capital World with a short position of Oppenheimer Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Oppenheimer Global.
Diversification Opportunities for Capital World and Oppenheimer Global
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Capital and Oppenheimer is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Bond and Oppenheimer Global Strtgc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Global Strtgc and Capital World 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 Capital World Bond 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 Strtgc has no effect on the direction of Capital World i.e., Capital World and Oppenheimer Global go up and down completely randomly.
Pair Corralation between Capital World and Oppenheimer Global
Assuming the 90 days horizon Capital World is expected to generate 12.05 times less return on investment than Oppenheimer Global. In addition to that, Capital World is 1.27 times more volatile than Oppenheimer Global Strtgc. It trades about 0.01 of its total potential returns per unit of risk. Oppenheimer Global Strtgc is currently generating about 0.14 per unit of volatility. If you would invest 306.00 in Oppenheimer Global Strtgc on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Oppenheimer Global Strtgc or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital World Bond vs. Oppenheimer Global Strtgc
Performance |
| Timeline |
| Capital World Bond |
| Oppenheimer Global Strtgc |
Capital World and Oppenheimer Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Oppenheimer Global
The main advantage of trading using opposite Capital World and Oppenheimer Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World 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.| Capital World vs. Fidelity Advisor Diversified | Capital World vs. Lord Abbett Diversified | Capital World vs. Calvert Conservative Allocation | Capital World vs. American Funds Conservative |
| Oppenheimer Global vs. Templeton Global Bond | Oppenheimer Global vs. Capital World Bond | Oppenheimer Global vs. Capital World Bond | Oppenheimer Global vs. Capital World Bond |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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