Correlation Between Oppenheimer International and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Oppenheimer International and Nationwide Growth 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 International and Nationwide Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer International Diversified and Nationwide Growth Fund, you can compare the effects of market volatilities on Oppenheimer International and Nationwide Growth 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 International with a short position of Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and Nationwide Growth.
Diversification Opportunities for Oppenheimer International and Nationwide Growth
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oppenheimer and Nationwide is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Dive and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth and Oppenheimer International 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 International Diversified are associated (or correlated) with Nationwide Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Growth has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Nationwide Growth go up and down completely randomly.
Pair Corralation between Oppenheimer International and Nationwide Growth
Assuming the 90 days horizon Oppenheimer International Diversified is expected to under-perform the Nationwide Growth. In addition to that, Oppenheimer International is 1.06 times more volatile than Nationwide Growth Fund. It trades about -0.04 of its total potential returns per unit of risk. Nationwide Growth Fund is currently generating about 0.36 per unit of volatility. If you would invest 1,404 in Nationwide Growth Fund on September 1, 2024 and sell it today you would earn a total of 80.00 from holding Nationwide Growth Fund or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oppenheimer International Dive vs. Nationwide Growth Fund
Performance |
| Timeline |
| Oppenheimer International |
| Nationwide Growth |
Oppenheimer International and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer International and Nationwide Growth
The main advantage of trading using opposite Oppenheimer International and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer International position performs unexpectedly, Nationwide Growth 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 Nationwide Growth will offset losses from the drop in Nationwide Growth's long position.The idea behind Oppenheimer International Diversified and Nationwide Growth Fund 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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