Correlation Between Oppenheimer Developing and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Developing and Emerging Markets 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 Emerging Markets 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 Emerging Markets Fund, you can compare the effects of market volatilities on Oppenheimer Developing and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Developing and Emerging Markets.
Diversification Opportunities for Oppenheimer Developing and Emerging Markets
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oppenheimer and Emerging is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Developing Markets and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Oppenheimer Developing i.e., Oppenheimer Developing and Emerging Markets go up and down completely randomly.
Pair Corralation between Oppenheimer Developing and Emerging Markets
Assuming the 90 days horizon Oppenheimer Developing Markets is expected to under-perform the Emerging Markets. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oppenheimer Developing Markets is 1.06 times less risky than Emerging Markets. The mutual fund trades about -0.3 of its potential returns per unit of risk. The Emerging Markets Fund is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,196 in Emerging Markets Fund on August 24, 2024 and sell it today you would lose (34.00) from holding Emerging Markets Fund or give up 2.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer Developing Markets vs. Emerging Markets Fund
Performance |
| Timeline |
| Oppenheimer Developing |
| Emerging Markets |
Oppenheimer Developing and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Developing and Emerging Markets
The main advantage of trading using opposite Oppenheimer Developing and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Developing position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Oppenheimer Developing vs. Vanguard Small Cap Value | Oppenheimer Developing vs. Boston Partners Small | Oppenheimer Developing vs. Mutual Of America | Oppenheimer Developing vs. Victory Rs Partners |
| Emerging Markets vs. Janus Triton Fund | Emerging Markets vs. Blackrock International Index | Emerging Markets vs. Real Estate Securities | Emerging Markets vs. State Street Equity |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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