Correlation Between Western Asset and Oppenheimer Active
Can any of the company-specific risk be diversified away by investing in both Western Asset and Oppenheimer Active 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 Western Asset and Oppenheimer Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset High and Oppenheimer Active Allctn, you can compare the effects of market volatilities on Western Asset and Oppenheimer Active 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 Western Asset with a short position of Oppenheimer Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Oppenheimer Active.
Diversification Opportunities for Western Asset and Oppenheimer Active
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Oppenheimer is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset High and Oppenheimer Active Allctn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Active Allctn and Western Asset 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 Western Asset High are associated (or correlated) with Oppenheimer Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Active Allctn has no effect on the direction of Western Asset i.e., Western Asset and Oppenheimer Active go up and down completely randomly.
Pair Corralation between Western Asset and Oppenheimer Active
Assuming the 90 days horizon Western Asset is expected to generate 9.55 times less return on investment than Oppenheimer Active. But when comparing it to its historical volatility, Western Asset High is 4.45 times less risky than Oppenheimer Active. It trades about 0.16 of its potential returns per unit of risk. Oppenheimer Active Allctn is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,407 in Oppenheimer Active Allctn on September 3, 2024 and sell it today you would earn a total of 59.00 from holding Oppenheimer Active Allctn or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset High vs. Oppenheimer Active Allctn
Performance |
| Timeline |
| Western Asset High |
| Oppenheimer Active Allctn |
Western Asset and Oppenheimer Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Oppenheimer Active
The main advantage of trading using opposite Western Asset and Oppenheimer Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Oppenheimer Active 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 Active will offset losses from the drop in Oppenheimer Active's long position.| Western Asset vs. Lord Abbett Convertible | Western Asset vs. Allianzgi Convertible Income | Western Asset vs. Putnam Convertible Incm Gwth | Western Asset vs. Virtus Convertible |
| Oppenheimer Active vs. Goldman Sachs Short | Oppenheimer Active vs. Limited Term Tax | Oppenheimer Active vs. Astor Longshort Fund | Oppenheimer Active vs. Barings Active Short |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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