Correlation Between Guidemark(r) Large and Oppenheimer Cap

Can any of the company-specific risk be diversified away by investing in both Guidemark(r) Large and Oppenheimer Cap 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 Guidemark(r) Large and Oppenheimer Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Guidemark(r) Large and Oppenheimer Cap

0.94

Correlation Coefficient

Guidemark(r) Large  Oppenheimer Cap

Almost no diversification

The 3 months correlation between GUIDEMARK(R) and Oppenheimer is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Oppenheimer Cap Apprec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Cap Apprec and Guidemark(r) Large 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 Guidemark Large Cap are associated (or correlated) with Oppenheimer Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Cap Apprec has no effect on the direction of Guidemark(r) Large i.e., Guidemark(r) Large and Oppenheimer Cap go up and down completely randomly.

Pair Corralation between Guidemark(r) Large and Oppenheimer Cap

Assuming the 90 days horizon Guidemark Large Cap is expected to generate 0.71 times more return on investment than Oppenheimer Cap. However, Guidemark Large Cap is 1.41 times less risky than Oppenheimer Cap. It trades about -0.12 of its potential returns per unit of risk. Oppenheimer Cap Apprec is currently generating about -0.09 per unit of risk. If you would invest  3,486  in Guidemark Large Cap on December 25, 2024 and sell it today you would lose (304.00) from holding Guidemark Large Cap or give up 8.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.33%
Values	Daily Returns

Guidemark Large Cap  vs.  Oppenheimer Cap Apprec

Guidemark Large Cap

Risk-Adjusted Performance

Very Weak

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

Oppenheimer Cap Apprec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oppenheimer Cap Apprec has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Guidemark(r) Large and Oppenheimer Cap

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

The idea behind Guidemark Large Cap and Oppenheimer Cap Apprec 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.