Correlation Between Champlain Mid and Oppenheimer Target

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

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

Diversification Opportunities for Champlain Mid and Oppenheimer Target

0.83

Correlation Coefficient

Champlain Mid  Oppenheimer Target

Very poor diversification

The 3 months correlation between Champlain and Oppenheimer is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Champlain Mid Cap and Oppenheimer Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Target and Champlain Mid 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 Champlain Mid Cap are associated (or correlated) with Oppenheimer Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Target has no effect on the direction of Champlain Mid i.e., Champlain Mid and Oppenheimer Target go up and down completely randomly.

Pair Corralation between Champlain Mid and Oppenheimer Target

Assuming the 90 days horizon Champlain Mid Cap is expected to under-perform the Oppenheimer Target. But the mutual fund apears to be less risky and, when comparing its historical volatility, Champlain Mid Cap is 1.01 times less risky than Oppenheimer Target. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Oppenheimer Target is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  4,518  in Oppenheimer Target on December 3, 2024 and sell it today you would lose (529.00) from holding Oppenheimer Target or give up 11.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Champlain Mid Cap  vs.  Oppenheimer Target

Champlain Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Champlain Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's primary indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Oppenheimer Target

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oppenheimer Target has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Champlain Mid and Oppenheimer Target

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

The idea behind Champlain Mid Cap and Oppenheimer Target 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.