Correlation Between Oppenheimer Holdings and LPL Financial
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Holdings and LPL Financial 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 Holdings and LPL Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer Holdings and LPL Financial Holdings, you can compare the effects of market volatilities on Oppenheimer Holdings and LPL Financial 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 Holdings with a short position of LPL Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Holdings and LPL Financial.
Diversification Opportunities for Oppenheimer Holdings and LPL Financial
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oppenheimer and LPL is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Holdings and LPL Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPL Financial Holdings and Oppenheimer Holdings 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 Holdings are associated (or correlated) with LPL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPL Financial Holdings has no effect on the direction of Oppenheimer Holdings i.e., Oppenheimer Holdings and LPL Financial go up and down completely randomly.
Pair Corralation between Oppenheimer Holdings and LPL Financial
Considering the 90-day investment horizon Oppenheimer Holdings is expected to generate 1.58 times less return on investment than LPL Financial. In addition to that, Oppenheimer Holdings is 2.04 times more volatile than LPL Financial Holdings. It trades about 0.13 of its total potential returns per unit of risk. LPL Financial Holdings is currently generating about 0.43 per unit of volatility. If you would invest 33,309 in LPL Financial Holdings on November 4, 2024 and sell it today you would earn a total of 3,380 from holding LPL Financial Holdings or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer Holdings vs. LPL Financial Holdings
Performance |
| Timeline |
| Oppenheimer Holdings |
| LPL Financial Holdings |
Oppenheimer Holdings and LPL Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Holdings and LPL Financial
The main advantage of trading using opposite Oppenheimer Holdings and LPL Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Holdings position performs unexpectedly, LPL Financial 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 LPL Financial will offset losses from the drop in LPL Financial's long position.| Oppenheimer Holdings vs. PJT Partners | Oppenheimer Holdings vs. Houlihan Lokey | Oppenheimer Holdings vs. Stifel Financial | Oppenheimer Holdings vs. Evercore Partners |
| LPL Financial vs. Tradeweb Markets | LPL Financial vs. Raymond James Financial | LPL Financial vs. PJT Partners | LPL Financial vs. Moelis Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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