Correlation Between Oppenheimer Strategic and Oppenheimer Gbl
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Strategic and Oppenheimer Gbl 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 Oppenheimer Gbl 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 Oppenheimer Gbl Alloc, you can compare the effects of market volatilities on Oppenheimer Strategic and Oppenheimer Gbl 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 Oppenheimer Gbl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Strategic and Oppenheimer Gbl.
Diversification Opportunities for Oppenheimer Strategic and Oppenheimer Gbl
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oppenheimer and Oppenheimer is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Strategic Income and Oppenheimer Gbl Alloc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Gbl Alloc 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 Oppenheimer Gbl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Gbl Alloc has no effect on the direction of Oppenheimer Strategic i.e., Oppenheimer Strategic and Oppenheimer Gbl go up and down completely randomly.
Pair Corralation between Oppenheimer Strategic and Oppenheimer Gbl
Assuming the 90 days horizon Oppenheimer Strategic Income is expected to under-perform the Oppenheimer Gbl. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oppenheimer Strategic Income is 1.29 times less risky than Oppenheimer Gbl. The mutual fund trades about -0.2 of its potential returns per unit of risk. The Oppenheimer Gbl Alloc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,927 in Oppenheimer Gbl Alloc on August 29, 2024 and sell it today you would lose (10.00) from holding Oppenheimer Gbl Alloc or give up 0.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Oppenheimer Strategic Income vs. Oppenheimer Gbl Alloc
Performance |
| Timeline |
| Oppenheimer Strategic |
| Oppenheimer Gbl Alloc |
Oppenheimer Strategic and Oppenheimer Gbl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Strategic and Oppenheimer Gbl
The main advantage of trading using opposite Oppenheimer Strategic and Oppenheimer Gbl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Strategic position performs unexpectedly, Oppenheimer Gbl 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 Oppenheimer Gbl will offset losses from the drop in Oppenheimer Gbl's long position.The idea behind Oppenheimer Strategic Income and Oppenheimer Gbl Alloc 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.
| Oppenheimer Gbl vs. Oppenheimer Cap Apprec | Oppenheimer Gbl vs. Oppenheimer Global Fd | Oppenheimer Gbl vs. Oppenheimer Main Strt | Oppenheimer Gbl vs. Oppenheimer Main Street |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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