Correlation Between Oppenheimer International and Invesco European
Can any of the company-specific risk be diversified away by investing in both Oppenheimer International and Invesco European 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 International and Invesco European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer International Small and Invesco European Small, you can compare the effects of market volatilities on Oppenheimer International and Invesco European 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 International with a short position of Invesco European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and Invesco European.
Diversification Opportunities for Oppenheimer International and Invesco European
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oppenheimer and Invesco is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Smal and Invesco European Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco European Small and Oppenheimer International 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 International Small are associated (or correlated) with Invesco European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco European Small has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Invesco European go up and down completely randomly.
Pair Corralation between Oppenheimer International and Invesco European
Assuming the 90 days horizon Oppenheimer International Small is expected to generate 0.91 times more return on investment than Invesco European. However, Oppenheimer International Small is 1.1 times less risky than Invesco European. It trades about -0.15 of its potential returns per unit of risk. Invesco European Small is currently generating about -0.14 per unit of risk. If you would invest 3,644 in Oppenheimer International Small on August 29, 2024 and sell it today you would lose (97.00) from holding Oppenheimer International Small or give up 2.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer International Smal vs. Invesco European Small
Performance |
| Timeline |
| Oppenheimer International |
| Invesco European Small |
Oppenheimer International and Invesco European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer International and Invesco European
The main advantage of trading using opposite Oppenheimer International and Invesco European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer International position performs unexpectedly, Invesco European 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 European will offset losses from the drop in Invesco European's long position.The idea behind Oppenheimer International Small and Invesco European Small 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 European vs. Invesco International Small | Invesco European vs. Invesco European Growth | Invesco European vs. Invesco Asia Pacific | Invesco European vs. Invesco European Small |
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.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |