Correlation Between Oppenheimer Discovery and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Discovery and Scharf 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 Oppenheimer Discovery and Scharf Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer Discovery Fd and Scharf Global Opportunity, you can compare the effects of market volatilities on Oppenheimer Discovery and Scharf 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 Oppenheimer Discovery with a short position of Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Discovery and Scharf Global.
Diversification Opportunities for Oppenheimer Discovery and Scharf Global
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oppenheimer and Scharf is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Discovery Fd and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity and Oppenheimer Discovery 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 Oppenheimer Discovery Fd are associated (or correlated) with Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Oppenheimer Discovery i.e., Oppenheimer Discovery and Scharf Global go up and down completely randomly.
Pair Corralation between Oppenheimer Discovery and Scharf Global
Assuming the 90 days horizon Oppenheimer Discovery Fd is expected to generate 2.73 times more return on investment than Scharf Global. However, Oppenheimer Discovery is 2.73 times more volatile than Scharf Global Opportunity. It trades about 0.31 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.37 per unit of risk. If you would invest 12,886 in Oppenheimer Discovery Fd on September 4, 2024 and sell it today you would earn a total of 1,398 from holding Oppenheimer Discovery Fd or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer Discovery Fd vs. Scharf Global Opportunity
Performance |
| Timeline |
| Oppenheimer Discovery |
| Scharf Global Opportunity |
Oppenheimer Discovery and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Discovery and Scharf Global
The main advantage of trading using opposite Oppenheimer Discovery and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Discovery position performs unexpectedly, Scharf 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 Scharf Global will offset losses from the drop in Scharf Global's long position.The idea behind Oppenheimer Discovery Fd and Scharf Global Opportunity 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.
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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