Correlation Between Oppenheimer Rochester and Franklin New
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Rochester and Franklin New 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 Rochester and Franklin New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer Rochester and Franklin New York, you can compare the effects of market volatilities on Oppenheimer Rochester and Franklin New 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 Rochester with a short position of Franklin New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Rochester and Franklin New.
Diversification Opportunities for Oppenheimer Rochester and Franklin New
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oppenheimer and Franklin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Rochester and Franklin New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin New York and Oppenheimer Rochester 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 Rochester are associated (or correlated) with Franklin New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin New York has no effect on the direction of Oppenheimer Rochester i.e., Oppenheimer Rochester and Franklin New go up and down completely randomly.
Pair Corralation between Oppenheimer Rochester and Franklin New
Assuming the 90 days horizon Oppenheimer Rochester is expected to generate 1.38 times more return on investment than Franklin New. However, Oppenheimer Rochester is 1.38 times more volatile than Franklin New York. It trades about 0.12 of its potential returns per unit of risk. Franklin New York is currently generating about 0.16 per unit of risk. If you would invest 1,513 in Oppenheimer Rochester on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Oppenheimer Rochester or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer Rochester vs. Franklin New York
Performance |
| Timeline |
| Oppenheimer Rochester |
| Franklin New York |
Oppenheimer Rochester and Franklin New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Rochester and Franklin New
The main advantage of trading using opposite Oppenheimer Rochester and Franklin New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Rochester position performs unexpectedly, Franklin New 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 Franklin New will offset losses from the drop in Franklin New's long position.| Oppenheimer Rochester vs. Nasdaq 100 Index Fund | Oppenheimer Rochester vs. Rbb Fund | Oppenheimer Rochester vs. T Rowe Price | Oppenheimer Rochester vs. Versatile Bond Portfolio |
| Franklin New vs. Bbh Intermediate Municipal | Franklin New vs. John Hancock Money | Franklin New vs. Versatile Bond Portfolio | Franklin New vs. Barings Active Short |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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