Correlation Between Oppenheimer International and Payden Corporate
Can any of the company-specific risk be diversified away by investing in both Oppenheimer International and Payden Corporate 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 Payden Corporate 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 Payden Porate Bond, you can compare the effects of market volatilities on Oppenheimer International and Payden Corporate 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 Payden Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and Payden Corporate.
Diversification Opportunities for Oppenheimer International and Payden Corporate
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oppenheimer and PAYDEN is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Dive and Payden Porate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Porate Bond 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 Payden Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Porate Bond has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Payden Corporate go up and down completely randomly.
Pair Corralation between Oppenheimer International and Payden Corporate
Assuming the 90 days horizon Oppenheimer International Diversified is expected to under-perform the Payden Corporate. In addition to that, Oppenheimer International is 2.14 times more volatile than Payden Porate Bond. It trades about -0.06 of its total potential returns per unit of risk. Payden Porate Bond is currently generating about 0.16 per unit of volatility. If you would invest 972.00 in Payden Porate Bond on December 1, 2024 and sell it today you would earn a total of 11.00 from holding Payden Porate Bond or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer International Dive vs. Payden Porate Bond
Performance |
| Timeline |
| Oppenheimer International |
| Payden Porate Bond |
Oppenheimer International and Payden Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer International and Payden Corporate
The main advantage of trading using opposite Oppenheimer International and Payden Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer International position performs unexpectedly, Payden Corporate 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 Payden Corporate will offset losses from the drop in Payden Corporate's long position.The idea behind Oppenheimer International Diversified and Payden Porate Bond 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.
| Payden Corporate vs. Morningstar Defensive Bond | Payden Corporate vs. Intermediate Term Bond Fund | Payden Corporate vs. Western Asset Municipal | Payden Corporate vs. Multisector Bond Sma |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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