Correlation Between Capital World and Oppenheimer Strategic
Can any of the company-specific risk be diversified away by investing in both Capital World and Oppenheimer Strategic 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 Capital World and Oppenheimer Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Bond and Oppenheimer Strategic Income, you can compare the effects of market volatilities on Capital World and Oppenheimer Strategic 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 Capital World with a short position of Oppenheimer Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Oppenheimer Strategic.
Diversification Opportunities for Capital World and Oppenheimer Strategic
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Capital and Oppenheimer is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Bond and Oppenheimer Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Strategic and Capital World 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 Capital World Bond are associated (or correlated) with Oppenheimer Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Strategic has no effect on the direction of Capital World i.e., Capital World and Oppenheimer Strategic go up and down completely randomly.
Pair Corralation between Capital World and Oppenheimer Strategic
Assuming the 90 days horizon Capital World is expected to generate 1.03 times less return on investment than Oppenheimer Strategic. In addition to that, Capital World is 1.03 times more volatile than Oppenheimer Strategic Income. It trades about 0.07 of its total potential returns per unit of risk. Oppenheimer Strategic Income is currently generating about 0.07 per unit of volatility. If you would invest 288.00 in Oppenheimer Strategic Income on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Oppenheimer Strategic Income or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital World Bond vs. Oppenheimer Strategic Income
Performance |
| Timeline |
| Capital World Bond |
| Oppenheimer Strategic |
Capital World and Oppenheimer Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Oppenheimer Strategic
The main advantage of trading using opposite Capital World and Oppenheimer Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World position performs unexpectedly, Oppenheimer Strategic 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 Strategic will offset losses from the drop in Oppenheimer Strategic's long position.| Capital World vs. Gmo Resources | Capital World vs. Dreyfus Natural Resources | Capital World vs. Franklin Natural Resources | Capital World vs. Oil Gas Ultrasector |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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