Correlation Between Donnelley Financial and Oppenheimer Holdings

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

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

Diversification Opportunities for Donnelley Financial and Oppenheimer Holdings

0.47

Correlation Coefficient

Donnelley Financial  Oppenheimer Holdings

Very weak diversification

The 3 months correlation between Donnelley and Oppenheimer is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Donnelley Financial Solutions and Oppenheimer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Holdings and Donnelley Financial 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 Donnelley Financial Solutions are associated (or correlated) with Oppenheimer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Holdings has no effect on the direction of Donnelley Financial i.e., Donnelley Financial and Oppenheimer Holdings go up and down completely randomly.

Pair Corralation between Donnelley Financial and Oppenheimer Holdings

Given the investment horizon of 90 days Donnelley Financial Solutions is expected to under-perform the Oppenheimer Holdings. In addition to that, Donnelley Financial is 1.72 times more volatile than Oppenheimer Holdings. It trades about -0.07 of its total potential returns per unit of risk. Oppenheimer Holdings is currently generating about 0.04 per unit of volatility. If you would invest  6,154  in Oppenheimer Holdings on November 28, 2024 and sell it today you would earn a total of  216.00  from holding Oppenheimer Holdings or generate 3.51% return on investment over 90 days.

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

Donnelley Financial Solutions  vs.  Oppenheimer Holdings

Donnelley Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Donnelley Financial Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Oppenheimer Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Donnelley Financial and Oppenheimer Holdings

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

The idea behind Donnelley Financial Solutions and Oppenheimer Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.