Correlation Between American Funds and Oppenheimer International
Can any of the company-specific risk be diversified away by investing in both American Funds and Oppenheimer International 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 American Funds and Oppenheimer International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Retirement and Oppenheimer International Small, you can compare the effects of market volatilities on American Funds and Oppenheimer International 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 American Funds with a short position of Oppenheimer International. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Oppenheimer International.
Diversification Opportunities for American Funds and Oppenheimer International
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between American and Oppenheimer is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Retirement and Oppenheimer International Smal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer International and American Funds 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 American Funds Retirement are associated (or correlated) with Oppenheimer International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer International has no effect on the direction of American Funds i.e., American Funds and Oppenheimer International go up and down completely randomly.
Pair Corralation between American Funds and Oppenheimer International
Assuming the 90 days horizon American Funds Retirement is expected to generate 0.47 times more return on investment than Oppenheimer International. However, American Funds Retirement is 2.15 times less risky than Oppenheimer International. It trades about 0.13 of its potential returns per unit of risk. Oppenheimer International Small is currently generating about 0.01 per unit of risk. If you would invest 1,152 in American Funds Retirement on September 3, 2024 and sell it today you would earn a total of 133.00 from holding American Funds Retirement or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Retirement vs. Oppenheimer International Smal
Performance |
| Timeline |
| American Funds Retirement |
| Oppenheimer International |
American Funds and Oppenheimer International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Oppenheimer International
The main advantage of trading using opposite American Funds and Oppenheimer International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Oppenheimer International 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 International will offset losses from the drop in Oppenheimer International's long position.| American Funds vs. Dreyfusstandish Global Fixed | American Funds vs. Ab Global Real | American Funds vs. Ab Global Real | American Funds vs. Qs Global Equity |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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