Correlation Between Cutler Equity and Oppenheimer Senior

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

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

Diversification Opportunities for Cutler Equity and Oppenheimer Senior

0.49

Correlation Coefficient

Cutler Equity  Oppenheimer Senior

Very weak diversification

The 3 months correlation between Cutler and Oppenheimer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and Oppenheimer Senior Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Senior and Cutler Equity 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 Cutler Equity are associated (or correlated) with Oppenheimer Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Senior has no effect on the direction of Cutler Equity i.e., Cutler Equity and Oppenheimer Senior go up and down completely randomly.

Pair Corralation between Cutler Equity and Oppenheimer Senior

Assuming the 90 days horizon Cutler Equity is expected to generate 4.04 times more return on investment than Oppenheimer Senior. However, Cutler Equity is 4.04 times more volatile than Oppenheimer Senior Floating. It trades about 0.19 of its potential returns per unit of risk. Oppenheimer Senior Floating is currently generating about 0.06 per unit of risk. If you would invest  2,731  in Cutler Equity on August 31, 2024 and sell it today you would earn a total of  208.00  from holding Cutler Equity or generate 7.62% return on investment over 90 days.

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

Cutler Equity  vs.  Oppenheimer Senior Floating

Cutler Equity

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cutler Equity are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Cutler Equity may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Oppenheimer Senior

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Senior Floating are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer Senior is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cutler Equity and Oppenheimer Senior

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

The idea behind Cutler Equity and Oppenheimer Senior Floating 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.