Correlation Between GM and Oppenheimer Rochester
Can any of the company-specific risk be diversified away by investing in both GM and Oppenheimer Rochester 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 GM and Oppenheimer Rochester into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Oppenheimer Rochester, you can compare the effects of market volatilities on GM and Oppenheimer Rochester 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 GM with a short position of Oppenheimer Rochester. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Oppenheimer Rochester.
Diversification Opportunities for GM and Oppenheimer Rochester
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Oppenheimer is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Oppenheimer Rochester in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Rochester and GM 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 General Motors are associated (or correlated) with Oppenheimer Rochester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Rochester has no effect on the direction of GM i.e., GM and Oppenheimer Rochester go up and down completely randomly.
Pair Corralation between GM and Oppenheimer Rochester
Allowing for the 90-day total investment horizon General Motors is expected to generate 5.69 times more return on investment than Oppenheimer Rochester. However, GM is 5.69 times more volatile than Oppenheimer Rochester. It trades about 0.17 of its potential returns per unit of risk. Oppenheimer Rochester is currently generating about 0.16 per unit of risk. If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Motors vs. Oppenheimer Rochester
Performance |
| Timeline |
| General Motors |
| Oppenheimer Rochester |
GM and Oppenheimer Rochester Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Oppenheimer Rochester
The main advantage of trading using opposite GM and Oppenheimer Rochester positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Oppenheimer Rochester 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 Rochester will offset losses from the drop in Oppenheimer Rochester's long position.The idea behind General Motors and Oppenheimer Rochester 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 Rochester vs. Opnhmr Rchstr Ltd | Oppenheimer Rochester vs. Oppenheimer Rochester High | Oppenheimer Rochester vs. Franklin New York | Oppenheimer Rochester vs. Oppenheimer Rchster Amt |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |