Correlation Between Western Asset and Oppenheimer Corporate
Can any of the company-specific risk be diversified away by investing in both Western Asset and Oppenheimer Corporate 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 Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Oppenheimer Corporate Bond, you can compare the effects of market volatilities on Western Asset and Oppenheimer Corporate 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 Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Oppenheimer Corporate.
Diversification Opportunities for Western Asset and Oppenheimer Corporate
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Oppenheimer is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Oppenheimer Corporate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Corporate 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 Diversified are associated (or correlated) with Oppenheimer Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Corporate has no effect on the direction of Western Asset i.e., Western Asset and Oppenheimer Corporate go up and down completely randomly.
Pair Corralation between Western Asset and Oppenheimer Corporate
Assuming the 90 days horizon Western Asset is expected to generate 1.8 times less return on investment than Oppenheimer Corporate. But when comparing it to its historical volatility, Western Asset Diversified is 1.26 times less risky than Oppenheimer Corporate. It trades about 0.08 of its potential returns per unit of risk. Oppenheimer Corporate Bond is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 927.00 in Oppenheimer Corporate Bond on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Oppenheimer Corporate Bond or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Western Asset Diversified vs. Oppenheimer Corporate Bond
Performance |
| Timeline |
| Western Asset Diversified |
| Oppenheimer Corporate |
Western Asset and Oppenheimer Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Oppenheimer Corporate
The main advantage of trading using opposite Western Asset and Oppenheimer Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Oppenheimer Corporate 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 Corporate will offset losses from the drop in Oppenheimer Corporate's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Oppenheimer Corporate vs. Western Asset Diversified | Oppenheimer Corporate vs. Aqr Sustainable Long Short | Oppenheimer Corporate vs. Origin Emerging Markets | Oppenheimer Corporate vs. Sp Midcap Index |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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