Correlation Between Oppenheimer Strategic and Invesco Comstock
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Strategic and Invesco Comstock 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 Comstock 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 Stock Fund, you can compare the effects of market volatilities on Oppenheimer Strategic and Invesco Comstock 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 Comstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Strategic and Invesco Comstock.
Diversification Opportunities for Oppenheimer Strategic and Invesco Comstock
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oppenheimer and Invesco is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Strategic Income and Invesco Stock Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Comstock 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 Comstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Comstock has no effect on the direction of Oppenheimer Strategic i.e., Oppenheimer Strategic and Invesco Comstock go up and down completely randomly.
Pair Corralation between Oppenheimer Strategic and Invesco Comstock
Assuming the 90 days horizon Oppenheimer Strategic is expected to generate 4.56 times less return on investment than Invesco Comstock. But when comparing it to its historical volatility, Oppenheimer Strategic Income is 3.03 times less risky than Invesco Comstock. It trades about 0.22 of its potential returns per unit of risk. Invesco Stock Fund is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,103 in Invesco Stock Fund on September 1, 2024 and sell it today you would earn a total of 197.00 from holding Invesco Stock Fund or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oppenheimer Strategic Income vs. Invesco Stock Fund
Performance |
| Timeline |
| Oppenheimer Strategic |
| Invesco Comstock |
Oppenheimer Strategic and Invesco Comstock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Strategic and Invesco Comstock
The main advantage of trading using opposite Oppenheimer Strategic and Invesco Comstock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Strategic position performs unexpectedly, Invesco Comstock 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 Comstock will offset losses from the drop in Invesco Comstock's long position.The idea behind Oppenheimer Strategic Income and Invesco Stock 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.
| Invesco Comstock vs. Invesco Municipal Income | Invesco Comstock vs. Invesco Municipal Income | Invesco Comstock vs. Invesco Municipal Income | Invesco Comstock 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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