Correlation Between Oppenheimer Strategic and Invesco Corporate
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Strategic and Invesco 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 Strategic and Invesco Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer Strategic Income and Invesco Porate Bond, you can compare the effects of market volatilities on Oppenheimer Strategic and Invesco 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 Strategic with a short position of Invesco Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Strategic and Invesco Corporate.
Diversification Opportunities for Oppenheimer Strategic and Invesco Corporate
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oppenheimer and Invesco is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Strategic Income and Invesco Porate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Porate Bond and Oppenheimer Strategic 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 Strategic Income are associated (or correlated) with Invesco Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Porate Bond has no effect on the direction of Oppenheimer Strategic i.e., Oppenheimer Strategic and Invesco Corporate go up and down completely randomly.
Pair Corralation between Oppenheimer Strategic and Invesco Corporate
Assuming the 90 days horizon Oppenheimer Strategic is expected to generate 1.47 times less return on investment than Invesco Corporate. In addition to that, Oppenheimer Strategic is 1.01 times more volatile than Invesco Porate Bond. It trades about 0.09 of its total potential returns per unit of risk. Invesco Porate Bond is currently generating about 0.13 per unit of volatility. If you would invest 545.00 in Invesco Porate Bond on August 26, 2024 and sell it today you would earn a total of 79.00 from holding Invesco Porate Bond or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer Strategic Income vs. Invesco Porate Bond
Performance |
| Timeline |
| Oppenheimer Strategic |
| Invesco Porate Bond |
Oppenheimer Strategic and Invesco Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Strategic and Invesco Corporate
The main advantage of trading using opposite Oppenheimer Strategic and Invesco Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Strategic position performs unexpectedly, Invesco 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 Invesco Corporate will offset losses from the drop in Invesco Corporate's long position.The idea behind Oppenheimer Strategic Income and Invesco 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.
| Invesco Corporate vs. Invesco Municipal Income | Invesco Corporate vs. Invesco Municipal Income | Invesco Corporate vs. Invesco Municipal Income | Invesco Corporate vs. Oppenheimer Rising Dividends |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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