Correlation Between Avantis Us and Oppenheimer Flexible

Can any of the company-specific risk be diversified away by investing in both Avantis Us and Oppenheimer Flexible 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 Avantis Us and Oppenheimer Flexible into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Avantis Large Cap and Oppenheimer Flexible Strategies, you can compare the effects of market volatilities on Avantis Us and Oppenheimer Flexible 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 Avantis Us with a short position of Oppenheimer Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Us and Oppenheimer Flexible.

Diversification Opportunities for Avantis Us and Oppenheimer Flexible

0.8

Correlation Coefficient

Avantis Us  Oppenheimer Flexible

Very poor diversification

The 3 months correlation between Avantis and Oppenheimer is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap and Oppenheimer Flexible Strategie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Flexible and Avantis Us 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 Avantis Large Cap are associated (or correlated) with Oppenheimer Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Flexible has no effect on the direction of Avantis Us i.e., Avantis Us and Oppenheimer Flexible go up and down completely randomly.

Pair Corralation between Avantis Us and Oppenheimer Flexible

Assuming the 90 days horizon Avantis Large Cap is expected to generate 3.71 times more return on investment than Oppenheimer Flexible. However, Avantis Us is 3.71 times more volatile than Oppenheimer Flexible Strategies. It trades about 0.07 of its potential returns per unit of risk. Oppenheimer Flexible Strategies is currently generating about 0.05 per unit of risk. If you would invest  1,081  in Avantis Large Cap on October 11, 2024 and sell it today you would earn a total of  350.00  from holding Avantis Large Cap or generate 32.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Avantis Large Cap  vs.  Oppenheimer Flexible Strategie

Avantis Large Cap

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Avantis Large Cap are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Avantis Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Flexible

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Flexible Strategies has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Oppenheimer Flexible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Avantis Us and Oppenheimer Flexible

The main advantage of trading using opposite Avantis Us and Oppenheimer Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Us position performs unexpectedly, Oppenheimer Flexible 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 Flexible will offset losses from the drop in Oppenheimer Flexible's long position.

The idea behind Avantis Large Cap and Oppenheimer Flexible Strategies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.