Correlation Between Greenhill and Oppenheimer Holdings

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

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

Diversification Opportunities for Greenhill and Oppenheimer Holdings

0.42

Correlation Coefficient

Greenhill  Oppenheimer Holdings

Very weak diversification

The 3 months correlation between Greenhill and Oppenheimer is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Greenhill Co and Oppenheimer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Holdings and Greenhill 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 Greenhill Co 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 Greenhill i.e., Greenhill and Oppenheimer Holdings go up and down completely randomly.

Pair Corralation between Greenhill and Oppenheimer Holdings

If you would invest  5,149  in Oppenheimer Holdings on August 31, 2024 and sell it today you would earn a total of  1,011  from holding Oppenheimer Holdings or generate 19.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Greenhill Co  vs.  Oppenheimer Holdings

Greenhill

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenhill Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, Greenhill is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Oppenheimer Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Oppenheimer Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greenhill and Oppenheimer Holdings

The main advantage of trading using opposite Greenhill and Oppenheimer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenhill 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 Greenhill Co 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.