Correlation Between Oppenheimer Strategic and Oppenheimer Rochester
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Strategic and Oppenheimer Rochester 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 Rochester 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 Rochester, you can compare the effects of market volatilities on Oppenheimer Strategic and Oppenheimer Rochester 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 Rochester. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Strategic and Oppenheimer Rochester.
Diversification Opportunities for Oppenheimer Strategic and Oppenheimer Rochester
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oppenheimer and Oppenheimer is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Strategic Income and Oppenheimer Rochester in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Rochester 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 Rochester. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Rochester has no effect on the direction of Oppenheimer Strategic i.e., Oppenheimer Strategic and Oppenheimer Rochester go up and down completely randomly.
Pair Corralation between Oppenheimer Strategic and Oppenheimer Rochester
Assuming the 90 days horizon Oppenheimer Strategic Income is expected to generate 1.09 times more return on investment than Oppenheimer Rochester. However, Oppenheimer Strategic is 1.09 times more volatile than Oppenheimer Rochester. It trades about 0.06 of its potential returns per unit of risk. Oppenheimer Rochester is currently generating about 0.06 per unit of risk. If you would invest 272.00 in Oppenheimer Strategic Income on August 30, 2024 and sell it today you would earn a total of 37.00 from holding Oppenheimer Strategic Income or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer Strategic Income vs. Oppenheimer Rochester
Performance |
| Timeline |
| Oppenheimer Strategic |
| Oppenheimer Rochester |
Oppenheimer Strategic and Oppenheimer Rochester Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Strategic and Oppenheimer Rochester
The main advantage of trading using opposite Oppenheimer Strategic and Oppenheimer Rochester positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Strategic position performs unexpectedly, Oppenheimer Rochester 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 Rochester will offset losses from the drop in Oppenheimer Rochester's long position.The idea behind Oppenheimer Strategic Income and Oppenheimer Rochester 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.
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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