Correlation Between Franklin Natural and Oppenheimer Strategic
Can any of the company-specific risk be diversified away by investing in both Franklin Natural and Oppenheimer Strategic 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 Franklin Natural and Oppenheimer Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Natural Resources and Oppenheimer Strategic Income, you can compare the effects of market volatilities on Franklin Natural and Oppenheimer Strategic 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 Franklin Natural with a short position of Oppenheimer Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Natural and Oppenheimer Strategic.
Diversification Opportunities for Franklin Natural and Oppenheimer Strategic
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Oppenheimer is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Natural Resources and Oppenheimer Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Strategic and Franklin Natural 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 Franklin Natural Resources are associated (or correlated) with Oppenheimer Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Strategic has no effect on the direction of Franklin Natural i.e., Franklin Natural and Oppenheimer Strategic go up and down completely randomly.
Pair Corralation between Franklin Natural and Oppenheimer Strategic
Assuming the 90 days horizon Franklin Natural Resources is expected to generate 2.69 times more return on investment than Oppenheimer Strategic. However, Franklin Natural is 2.69 times more volatile than Oppenheimer Strategic Income. It trades about 0.05 of its potential returns per unit of risk. Oppenheimer Strategic Income is currently generating about 0.08 per unit of risk. If you would invest 2,823 in Franklin Natural Resources on September 1, 2024 and sell it today you would earn a total of 336.00 from holding Franklin Natural Resources or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Natural Resources vs. Oppenheimer Strategic Income
Performance |
| Timeline |
| Franklin Natural Res |
| Oppenheimer Strategic |
Franklin Natural and Oppenheimer Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Natural and Oppenheimer Strategic
The main advantage of trading using opposite Franklin Natural and Oppenheimer Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Natural position performs unexpectedly, Oppenheimer Strategic 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 Strategic will offset losses from the drop in Oppenheimer Strategic's long position.| Franklin Natural vs. Lord Abbett Small | Franklin Natural vs. Great West Loomis Sayles | Franklin Natural vs. Amg River Road | Franklin Natural vs. Heartland Value Plus |
| Oppenheimer Strategic vs. Oppenheimer Main Street | Oppenheimer Strategic vs. Oppenheimer Intl Small | Oppenheimer Strategic vs. Oppenheimer Main Street | Oppenheimer Strategic vs. Oppenheimer Strat Incm |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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