Correlation Between Visa and Oppenheimer Holdings
Can any of the company-specific risk be diversified away by investing in both Visa and Oppenheimer Holdings 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 Visa and Oppenheimer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Oppenheimer Holdings, you can compare the effects of market volatilities on Visa and Oppenheimer Holdings 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 Visa with a short position of Oppenheimer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Oppenheimer Holdings.
Diversification Opportunities for Visa and Oppenheimer Holdings
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Visa and Oppenheimer is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Oppenheimer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Holdings and Visa 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 Visa Class A are associated (or correlated) with Oppenheimer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Holdings has no effect on the direction of Visa i.e., Visa and Oppenheimer Holdings go up and down completely randomly.
Pair Corralation between Visa and Oppenheimer Holdings
Taking into account the 90-day investment horizon Visa is expected to generate 1.2 times less return on investment than Oppenheimer Holdings. But when comparing it to its historical volatility, Visa Class A is 1.67 times less risky than Oppenheimer Holdings. It trades about 0.08 of its potential returns per unit of risk. Oppenheimer Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,995 in Oppenheimer Holdings on August 25, 2024 and sell it today you would earn a total of 2,098 from holding Oppenheimer Holdings or generate 52.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Visa Class A vs. Oppenheimer Holdings
Performance |
| Timeline |
| Visa Class A |
| Oppenheimer Holdings |
Visa and Oppenheimer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Oppenheimer Holdings
The main advantage of trading using opposite Visa and Oppenheimer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, Oppenheimer Holdings 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 Holdings will offset losses from the drop in Oppenheimer Holdings' long position.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| Oppenheimer Holdings vs. PJT Partners | Oppenheimer Holdings vs. Houlihan Lokey | Oppenheimer Holdings vs. Stifel Financial | Oppenheimer Holdings vs. Evercore Partners |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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