Correlation Between Wells Fargo and Oppenheimer Capital
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Oppenheimer Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Funds and Oppenheimer Capital Appreciation, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Oppenheimer Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Oppenheimer Capital.
Diversification Opportunities for Wells Fargo and Oppenheimer Capital
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wells and Oppenheimer is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Funds and Oppenheimer Capital Appreciati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Capital 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 Funds 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 Wells Fargo i.e., Wells Fargo and Oppenheimer Capital go up and down completely randomly.
Pair Corralation between Wells Fargo and Oppenheimer Capital
Assuming the 90 days horizon Wells Fargo is expected to generate 11.66 times less return on investment than Oppenheimer Capital. But when comparing it to its historical volatility, Wells Fargo Funds is 6.11 times less risky than Oppenheimer Capital. It trades about 0.06 of its potential returns per unit of risk. Oppenheimer Capital Appreciation is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,279 in Oppenheimer Capital Appreciation on September 4, 2024 and sell it today you would earn a total of 2,917 from holding Oppenheimer Capital Appreciation or generate 40.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Wells Fargo Funds vs. Oppenheimer Capital Appreciati
Performance |
| Timeline |
| Wells Fargo Funds |
| Oppenheimer Capital |
Wells Fargo and Oppenheimer Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Oppenheimer Capital
The main advantage of trading using opposite Wells Fargo and Oppenheimer Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. Vanguard Total Stock | Wells Fargo vs. Vanguard 500 Index | Wells Fargo vs. Vanguard Total Stock | Wells Fargo vs. Vanguard Total Stock |
| Oppenheimer Capital vs. Wells Fargo Funds | Oppenheimer Capital vs. Ashmore Emerging Markets | Oppenheimer Capital vs. Transamerica Funds | Oppenheimer Capital vs. Janus Investment |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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