Correlation Between Needham Small and Oppenheimer Intl
Can any of the company-specific risk be diversified away by investing in both Needham Small and Oppenheimer Intl 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 Needham Small and Oppenheimer Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Needham Small Cap and Oppenheimer Intl Small, you can compare the effects of market volatilities on Needham Small and Oppenheimer Intl 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 Needham Small with a short position of Oppenheimer Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Needham Small and Oppenheimer Intl.
Diversification Opportunities for Needham Small and Oppenheimer Intl
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Needham and Oppenheimer is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Needham Small Cap and Oppenheimer Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Intl Small and Needham Small 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 Needham Small Cap are associated (or correlated) with Oppenheimer Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Intl Small has no effect on the direction of Needham Small i.e., Needham Small and Oppenheimer Intl go up and down completely randomly.
Pair Corralation between Needham Small and Oppenheimer Intl
Assuming the 90 days horizon Needham Small Cap is expected to generate 1.7 times more return on investment than Oppenheimer Intl. However, Needham Small is 1.7 times more volatile than Oppenheimer Intl Small. It trades about 0.21 of its potential returns per unit of risk. Oppenheimer Intl Small is currently generating about 0.13 per unit of risk. If you would invest 1,878 in Needham Small Cap on October 25, 2024 and sell it today you would earn a total of 98.00 from holding Needham Small Cap or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Needham Small Cap vs. Oppenheimer Intl Small
Performance |
| Timeline |
| Needham Small Cap |
| Oppenheimer Intl Small |
Needham Small and Oppenheimer Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Needham Small and Oppenheimer Intl
The main advantage of trading using opposite Needham Small and Oppenheimer Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Needham Small position performs unexpectedly, Oppenheimer Intl 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 Intl will offset losses from the drop in Oppenheimer Intl's long position.| Needham Small vs. Needham Aggressive Growth | Needham Small vs. Needham Growth Fund | Needham Small vs. Baron Opportunity Fund | Needham Small vs. Jacob Micro Cap |
| Oppenheimer Intl vs. Astoncrosswind Small Cap | Oppenheimer Intl vs. Goldman Sachs Smallmid | Oppenheimer Intl vs. Kinetics Small Cap | Oppenheimer Intl vs. Buffalo Small Cap |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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