Correlation Between Western Asset and Oppenheimer Global
Can any of the company-specific risk be diversified away by investing in both Western Asset and Oppenheimer Global 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 Global 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 Global Multi Asset, you can compare the effects of market volatilities on Western Asset and Oppenheimer Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Oppenheimer Global.
Diversification Opportunities for Western Asset and Oppenheimer Global
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Western and Oppenheimer is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Oppenheimer Global Multi Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Global 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Global has no effect on the direction of Western Asset i.e., Western Asset and Oppenheimer Global go up and down completely randomly.
Pair Corralation between Western Asset and Oppenheimer Global
Assuming the 90 days horizon Western Asset Diversified is expected to generate 0.37 times more return on investment than Oppenheimer Global. However, Western Asset Diversified is 2.72 times less risky than Oppenheimer Global. It trades about -0.12 of its potential returns per unit of risk. Oppenheimer Global Multi Asset is currently generating about -0.13 per unit of risk. If you would invest 1,570 in Western Asset Diversified on September 3, 2024 and sell it today you would lose (21.00) from holding Western Asset Diversified or give up 1.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Oppenheimer Global Multi Asset
Performance |
| Timeline |
| Western Asset Diversified |
| Oppenheimer Global |
Western Asset and Oppenheimer Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Oppenheimer Global
The main advantage of trading using opposite Western Asset and Oppenheimer Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Oppenheimer Global 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 Global will offset losses from the drop in Oppenheimer Global'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 Global vs. Aqr Diversified Arbitrage | Oppenheimer Global vs. Massmutual Premier Diversified | Oppenheimer Global vs. Lord Abbett Diversified | Oppenheimer Global vs. Western Asset Diversified |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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