Correlation Between Guidemark(r) Small/mid and Oppenheimer Roc

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Can any of the company-specific risk be diversified away by investing in both Guidemark(r) Small/mid and Oppenheimer Roc 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) Small/mid and Oppenheimer Roc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Smallmid Cap and Oppenheimer Roc Ca, you can compare the effects of market volatilities on Guidemark(r) Small/mid and Oppenheimer Roc 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) Small/mid with a short position of Oppenheimer Roc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark(r) Small/mid and Oppenheimer Roc.

Diversification Opportunities for Guidemark(r) Small/mid and Oppenheimer Roc

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Guidemark(r) and Oppenheimer is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Smallmid Cap and Oppenheimer Roc Ca in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Roc Ca and Guidemark(r) Small/mid 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 Smallmid Cap are associated (or correlated) with Oppenheimer Roc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Roc Ca has no effect on the direction of Guidemark(r) Small/mid i.e., Guidemark(r) Small/mid and Oppenheimer Roc go up and down completely randomly.

Pair Corralation between Guidemark(r) Small/mid and Oppenheimer Roc

Assuming the 90 days horizon Guidemark Smallmid Cap is expected to generate 3.98 times more return on investment than Oppenheimer Roc. However, Guidemark(r) Small/mid is 3.98 times more volatile than Oppenheimer Roc Ca. It trades about 0.03 of its potential returns per unit of risk. Oppenheimer Roc Ca is currently generating about 0.03 per unit of risk. If you would invest  1,735  in Guidemark Smallmid Cap on October 4, 2024 and sell it today you would earn a total of  218.00  from holding Guidemark Smallmid Cap or generate 12.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Guidemark Smallmid Cap  vs.  Oppenheimer Roc Ca

 Performance 
       Timeline  
Guidemark Smallmid Cap 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Guidemark Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Guidemark(r) Small/mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Oppenheimer Roc Ca 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Oppenheimer Roc Ca has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Oppenheimer Roc is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidemark(r) Small/mid and Oppenheimer Roc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guidemark(r) Small/mid and Oppenheimer Roc

The main advantage of trading using opposite Guidemark(r) Small/mid and Oppenheimer Roc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark(r) Small/mid position performs unexpectedly, Oppenheimer Roc 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 Roc will offset losses from the drop in Oppenheimer Roc's long position.
The idea behind Guidemark Smallmid Cap and Oppenheimer Roc Ca 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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