Correlation Between Oppenheimer Developing and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Developing and Baillie Gifford 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 Developing and Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer Developing Markets and Baillie Gifford Health, you can compare the effects of market volatilities on Oppenheimer Developing and Baillie Gifford 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 Developing with a short position of Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Developing and Baillie Gifford.
Diversification Opportunities for Oppenheimer Developing and Baillie Gifford
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Oppenheimer and Baillie is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Developing Markets and Baillie Gifford Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Health and Oppenheimer Developing 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 Developing Markets are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Health has no effect on the direction of Oppenheimer Developing i.e., Oppenheimer Developing and Baillie Gifford go up and down completely randomly.
Pair Corralation between Oppenheimer Developing and Baillie Gifford
Assuming the 90 days horizon Oppenheimer Developing Markets is expected to generate 0.69 times more return on investment than Baillie Gifford. However, Oppenheimer Developing Markets is 1.45 times less risky than Baillie Gifford. It trades about 0.0 of its potential returns per unit of risk. Baillie Gifford Health is currently generating about -0.03 per unit of risk. If you would invest 3,806 in Oppenheimer Developing Markets on September 4, 2024 and sell it today you would lose (38.00) from holding Oppenheimer Developing Markets or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Oppenheimer Developing Markets vs. Baillie Gifford Health
Performance |
| Timeline |
| Oppenheimer Developing |
| Baillie Gifford Health |
Oppenheimer Developing and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Developing and Baillie Gifford
The main advantage of trading using opposite Oppenheimer Developing and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Developing position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Oppenheimer Developing vs. Lord Abbett High | Oppenheimer Developing vs. Artisan High Income | Oppenheimer Developing vs. Prudential High Yield | Oppenheimer Developing vs. Calvert High Yield |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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