Correlation Between Oppenheimer Rochester and Mainstay New
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Rochester and Mainstay 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 Mainstay 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 Mainstay New York, you can compare the effects of market volatilities on Oppenheimer Rochester and Mainstay 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 Mainstay New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Rochester and Mainstay New.
Diversification Opportunities for Oppenheimer Rochester and Mainstay New
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oppenheimer and Mainstay is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Rochester and Mainstay New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay 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 Mainstay New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay New York has no effect on the direction of Oppenheimer Rochester i.e., Oppenheimer Rochester and Mainstay New go up and down completely randomly.
Pair Corralation between Oppenheimer Rochester and Mainstay New
Assuming the 90 days horizon Oppenheimer Rochester is expected to generate 1.36 times more return on investment than Mainstay New. However, Oppenheimer Rochester is 1.36 times more volatile than Mainstay New York. It trades about 0.16 of its potential returns per unit of risk. Mainstay New York is currently generating about 0.16 per unit of risk. If you would invest 1,515 in Oppenheimer Rochester on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Oppenheimer Rochester or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oppenheimer Rochester vs. Mainstay New York
Performance |
| Timeline |
| Oppenheimer Rochester |
| Mainstay New York |
Oppenheimer Rochester and Mainstay New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Rochester and Mainstay New
The main advantage of trading using opposite Oppenheimer Rochester and Mainstay New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Rochester position performs unexpectedly, Mainstay 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 Mainstay New will offset losses from the drop in Mainstay New's long position.The idea behind Oppenheimer Rochester and Mainstay New York 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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