Correlation Between Shenkman Floating and Oppenheimer Senior
Can any of the company-specific risk be diversified away by investing in both Shenkman Floating and Oppenheimer Senior 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 Shenkman Floating and Oppenheimer Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenkman Floating Rate and Oppenheimer Senior Floating, you can compare the effects of market volatilities on Shenkman Floating and Oppenheimer Senior 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 Shenkman Floating with a short position of Oppenheimer Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenkman Floating and Oppenheimer Senior.
Diversification Opportunities for Shenkman Floating and Oppenheimer Senior
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenkman and Oppenheimer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenkman Floating Rate and Oppenheimer Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Senior and Shenkman Floating 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 Shenkman Floating Rate are associated (or correlated) with Oppenheimer Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Senior has no effect on the direction of Shenkman Floating i.e., Shenkman Floating and Oppenheimer Senior go up and down completely randomly.
Pair Corralation between Shenkman Floating and Oppenheimer Senior
Assuming the 90 days horizon Shenkman Floating is expected to generate 1.06 times less return on investment than Oppenheimer Senior. But when comparing it to its historical volatility, Shenkman Floating Rate is 2.66 times less risky than Oppenheimer Senior. It trades about 0.44 of its potential returns per unit of risk. Oppenheimer Senior Floating is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 574.00 in Oppenheimer Senior Floating on September 4, 2024 and sell it today you would earn a total of 84.00 from holding Oppenheimer Senior Floating or generate 14.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Shenkman Floating Rate vs. Oppenheimer Senior Floating
Performance |
| Timeline |
| Shenkman Floating Rate |
| Oppenheimer Senior |
Shenkman Floating and Oppenheimer Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenkman Floating and Oppenheimer Senior
The main advantage of trading using opposite Shenkman Floating and Oppenheimer Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenkman Floating position performs unexpectedly, Oppenheimer Senior 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 Senior will offset losses from the drop in Oppenheimer Senior's long position.| Shenkman Floating vs. Shenkman Short Duration | Shenkman Floating vs. Shenkman Short Duration | Shenkman Floating vs. Shenkman Short Duration | Shenkman Floating vs. Shenkman Short Duration |
| Oppenheimer Senior vs. Oppenheimer Main Street | Oppenheimer Senior vs. Oppenheimer Intl Small | Oppenheimer Senior vs. Oppenheimer Main Street | Oppenheimer Senior vs. Oppenheimer Global Strtgc |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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