Correlation Between Capital World and Oppenheimer Capital
Can any of the company-specific risk be diversified away by investing in both Capital World and Oppenheimer Capital 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 Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Growth and Oppenheimer Capital Appreciation, you can compare the effects of market volatilities on Capital World and Oppenheimer Capital 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 Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Oppenheimer Capital.
Diversification Opportunities for Capital World and Oppenheimer Capital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Oppenheimer is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Growth and Oppenheimer Capital Appreciati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Capital 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 Growth are associated (or correlated) with Oppenheimer Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Capital has no effect on the direction of Capital World i.e., Capital World and Oppenheimer Capital go up and down completely randomly.
Pair Corralation between Capital World and Oppenheimer Capital
Assuming the 90 days horizon Capital World is expected to generate 1.75 times less return on investment than Oppenheimer Capital. But when comparing it to its historical volatility, Capital World Growth is 1.49 times less risky than Oppenheimer Capital. It trades about 0.09 of its potential returns per unit of risk. Oppenheimer Capital Appreciation is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,886 in Oppenheimer Capital Appreciation on September 3, 2024 and sell it today you would earn a total of 4,252 from holding Oppenheimer Capital Appreciation or generate 72.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital World Growth vs. Oppenheimer Capital Appreciati
Performance |
| Timeline |
| Capital World Growth |
| Oppenheimer Capital |
Capital World and Oppenheimer Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Oppenheimer Capital
The main advantage of trading using opposite Capital World and Oppenheimer Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World position performs unexpectedly, Oppenheimer Capital 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 Capital will offset losses from the drop in Oppenheimer Capital's long position.| Capital World vs. Health Biotchnology Portfolio | Capital World vs. Eventide Healthcare Life | Capital World vs. Alphacentric Lifesci Healthcare | Capital World vs. Lord Abbett Health |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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