Correlation Between Oppenheimer Rochester and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Rochester and Nasdaq 100 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 Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer Rochester and Nasdaq 100 Index Fund, you can compare the effects of market volatilities on Oppenheimer Rochester and Nasdaq 100 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 Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Rochester and Nasdaq 100.
Diversification Opportunities for Oppenheimer Rochester and Nasdaq 100
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oppenheimer and Nasdaq is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Rochester and Nasdaq 100 Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Index 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 Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Index has no effect on the direction of Oppenheimer Rochester i.e., Oppenheimer Rochester and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Oppenheimer Rochester and Nasdaq 100
Assuming the 90 days horizon Oppenheimer Rochester is expected to generate 3.07 times less return on investment than Nasdaq 100. But when comparing it to its historical volatility, Oppenheimer Rochester is 1.99 times less risky than Nasdaq 100. It trades about 0.16 of its potential returns per unit of risk. Nasdaq 100 Index Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,998 in Nasdaq 100 Index Fund on September 1, 2024 and sell it today you would earn a total of 264.00 from holding Nasdaq 100 Index Fund or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oppenheimer Rochester vs. Nasdaq 100 Index Fund
Performance |
| Timeline |
| Oppenheimer Rochester |
| Nasdaq 100 Index |
Oppenheimer Rochester and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Rochester and Nasdaq 100
The main advantage of trading using opposite Oppenheimer Rochester and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Rochester position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.The idea behind Oppenheimer Rochester and Nasdaq 100 Index Fund 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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