Correlation Between Wells Fargo and Oppenheimer Senior
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Oppenheimer Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Short Term and Oppenheimer Senior Floating, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Oppenheimer Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Oppenheimer Senior.
Diversification Opportunities for Wells Fargo and Oppenheimer Senior
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wells and Oppenheimer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Short Term and Oppenheimer Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Senior and Wells Fargo 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 Wells Fargo Short Term 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 Wells Fargo i.e., Wells Fargo and Oppenheimer Senior go up and down completely randomly.
Pair Corralation between Wells Fargo and Oppenheimer Senior
Assuming the 90 days horizon Wells Fargo is expected to generate 1.66 times less return on investment than Oppenheimer Senior. But when comparing it to its historical volatility, Wells Fargo Short Term is 1.47 times less risky than Oppenheimer Senior. It trades about 0.15 of its potential returns per unit of risk. Oppenheimer Senior Floating is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 555.00 in Oppenheimer Senior Floating on November 2, 2024 and sell it today you would earn a total of 105.00 from holding Oppenheimer Senior Floating or generate 18.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wells Fargo Short Term vs. Oppenheimer Senior Floating
Performance |
| Timeline |
| Wells Fargo Short |
| Oppenheimer Senior |
Wells Fargo and Oppenheimer Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Oppenheimer Senior
The main advantage of trading using opposite Wells Fargo and Oppenheimer Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. Angel Oak Financial | Wells Fargo vs. Siit High Yield | Wells Fargo vs. Barings High Yield | Wells Fargo vs. Ab Bond Inflation |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |