Correlation Between Dimensional Core and Oppenheimer Russell

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

By analyzing existing cross correlation between Dimensional Core Equity and Oppenheimer Russell 1000, you can compare the effects of market volatilities on Dimensional Core and Oppenheimer Russell 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 Dimensional Core with a short position of Oppenheimer Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional Core and Oppenheimer Russell.

Diversification Opportunities for Dimensional Core and Oppenheimer Russell

0.98

Correlation Coefficient

Dimensional Core  Oppenheimer Russell

Almost no diversification

The 3 months correlation between Dimensional and Oppenheimer is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional Core Equity and Oppenheimer Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Russell 1000 and Dimensional Core 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 Dimensional Core Equity are associated (or correlated) with Oppenheimer Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Russell 1000 has no effect on the direction of Dimensional Core i.e., Dimensional Core and Oppenheimer Russell go up and down completely randomly.

Pair Corralation between Dimensional Core and Oppenheimer Russell

Given the investment horizon of 90 days Dimensional Core is expected to generate 1.09 times less return on investment than Oppenheimer Russell. In addition to that, Dimensional Core is 1.04 times more volatile than Oppenheimer Russell 1000. It trades about 0.15 of its total potential returns per unit of risk. Oppenheimer Russell 1000 is currently generating about 0.17 per unit of volatility. If you would invest  5,210  in Oppenheimer Russell 1000 on September 16, 2024 and sell it today you would earn a total of  409.00  from holding Oppenheimer Russell 1000 or generate 7.85% return on investment over 90 days.

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

Dimensional Core Equity  vs.  Oppenheimer Russell 1000

Dimensional Core Equity

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional Core Equity are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Dimensional Core may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oppenheimer Russell 1000

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Russell 1000 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, Oppenheimer Russell may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Dimensional Core and Oppenheimer Russell

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

The idea behind Dimensional Core Equity and Oppenheimer Russell 1000 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.