Correlation Between The Hartford and Oppenheimer Senior
Can any of the company-specific risk be diversified away by investing in both The Hartford and Oppenheimer Senior 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 The Hartford and Oppenheimer Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Growth and Oppenheimer Senior Floating, you can compare the effects of market volatilities on The Hartford and Oppenheimer Senior 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 The Hartford with a short position of Oppenheimer Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Oppenheimer Senior.
Diversification Opportunities for The Hartford and Oppenheimer Senior
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Oppenheimer is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Growth and Oppenheimer Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Senior and The Hartford 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 The Hartford Growth are associated (or correlated) with Oppenheimer Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Senior has no effect on the direction of The Hartford i.e., The Hartford and Oppenheimer Senior go up and down completely randomly.
Pair Corralation between The Hartford and Oppenheimer Senior
Assuming the 90 days horizon The Hartford Growth is expected to generate 5.68 times more return on investment than Oppenheimer Senior. However, The Hartford is 5.68 times more volatile than Oppenheimer Senior Floating. It trades about 0.11 of its potential returns per unit of risk. Oppenheimer Senior Floating is currently generating about 0.17 per unit of risk. If you would invest 3,724 in The Hartford Growth on November 2, 2024 and sell it today you would earn a total of 3,198 from holding The Hartford Growth or generate 85.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Growth vs. Oppenheimer Senior Floating
Performance |
| Timeline |
| Hartford Growth |
| Oppenheimer Senior |
The Hartford and Oppenheimer Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Oppenheimer Senior
The main advantage of trading using opposite The Hartford and Oppenheimer Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Oppenheimer Senior 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 Senior will offset losses from the drop in Oppenheimer Senior's long position.| The Hartford vs. Mutual Of America | The Hartford vs. Victory Rs Partners | The Hartford vs. Omni Small Cap Value | The Hartford vs. Applied Finance Explorer |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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