Correlation Between Oppenheimer Senior and Barloworld
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Senior and Barloworld 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 Senior and Barloworld into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer Senior Floating and Barloworld Ltd ADR, you can compare the effects of market volatilities on Oppenheimer Senior and Barloworld 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 Senior with a short position of Barloworld. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Senior and Barloworld.
Diversification Opportunities for Oppenheimer Senior and Barloworld
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oppenheimer and Barloworld is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Senior Floating and Barloworld Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barloworld ADR and Oppenheimer Senior 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 Senior Floating are associated (or correlated) with Barloworld. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barloworld ADR has no effect on the direction of Oppenheimer Senior i.e., Oppenheimer Senior and Barloworld go up and down completely randomly.
Pair Corralation between Oppenheimer Senior and Barloworld
Assuming the 90 days horizon Oppenheimer Senior is expected to generate 9.91 times less return on investment than Barloworld. But when comparing it to its historical volatility, Oppenheimer Senior Floating is 21.09 times less risky than Barloworld. It trades about 0.13 of its potential returns per unit of risk. Barloworld Ltd ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 334.00 in Barloworld Ltd ADR on September 1, 2024 and sell it today you would earn a total of 89.00 from holding Barloworld Ltd ADR or generate 26.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.53% |
| Values | Daily Returns |
Oppenheimer Senior Floating vs. Barloworld Ltd ADR
Performance |
| Timeline |
| Oppenheimer Senior |
| Barloworld ADR |
Oppenheimer Senior and Barloworld Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Senior and Barloworld
The main advantage of trading using opposite Oppenheimer Senior and Barloworld positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Senior position performs unexpectedly, Barloworld 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 Barloworld will offset losses from the drop in Barloworld's long position.| Oppenheimer Senior vs. Technology Ultrasector Profund | Oppenheimer Senior vs. Goldman Sachs Technology | Oppenheimer Senior vs. Dreyfus Technology Growth | Oppenheimer Senior vs. Towpath Technology |
| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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