Correlation Between Anchor Risk and Oppenheimer Moderate

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

By analyzing existing cross correlation between Anchor Risk Managed and Oppenheimer Moderate Investor, you can compare the effects of market volatilities on Anchor Risk and Oppenheimer Moderate 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 Anchor Risk with a short position of Oppenheimer Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anchor Risk and Oppenheimer Moderate.

Diversification Opportunities for Anchor Risk and Oppenheimer Moderate

0.85

Correlation Coefficient

Anchor Risk  Oppenheimer Moderate

Very poor diversification

The 3 months correlation between Anchor and Oppenheimer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Anchor Risk Managed and Oppenheimer Moderate Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Moderate and Anchor Risk 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 Anchor Risk Managed are associated (or correlated) with Oppenheimer Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Moderate has no effect on the direction of Anchor Risk i.e., Anchor Risk and Oppenheimer Moderate go up and down completely randomly.

Pair Corralation between Anchor Risk and Oppenheimer Moderate

Assuming the 90 days horizon Anchor Risk is expected to generate 1.37 times less return on investment than Oppenheimer Moderate. But when comparing it to its historical volatility, Anchor Risk Managed is 1.17 times less risky than Oppenheimer Moderate. It trades about 0.13 of its potential returns per unit of risk. Oppenheimer Moderate Investor is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,132  in Oppenheimer Moderate Investor on September 2, 2024 and sell it today you would earn a total of  50.00  from holding Oppenheimer Moderate Investor or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Anchor Risk Managed  vs.  Oppenheimer Moderate Investor

Anchor Risk Managed

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anchor Risk Managed are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Anchor Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Moderate

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Moderate Investor are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Oppenheimer Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Anchor Risk and Oppenheimer Moderate

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

The idea behind Anchor Risk Managed and Oppenheimer Moderate Investor 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.