Correlation Between Lord Abbett and Oppenheimer Strategic

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

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

Diversification Opportunities for Lord Abbett and Oppenheimer Strategic

0.95

Correlation Coefficient

Lord Abbett  Oppenheimer Strategic

Almost no diversification

The 3 months correlation between Lord and Oppenheimer is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett Inflation and Oppenheimer Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Strategic and Lord Abbett 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 Lord Abbett Inflation are associated (or correlated) with Oppenheimer Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Strategic has no effect on the direction of Lord Abbett i.e., Lord Abbett and Oppenheimer Strategic go up and down completely randomly.

Pair Corralation between Lord Abbett and Oppenheimer Strategic

Assuming the 90 days horizon Lord Abbett is expected to generate 1.08 times less return on investment than Oppenheimer Strategic. But when comparing it to its historical volatility, Lord Abbett Inflation is 1.84 times less risky than Oppenheimer Strategic. It trades about 0.32 of its potential returns per unit of risk. Oppenheimer Strategic Income is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  304.00  in Oppenheimer Strategic Income on December 30, 2024 and sell it today you would earn a total of  10.00  from holding Oppenheimer Strategic Income or generate 3.29% return on investment over 90 days.

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

Lord Abbett Inflation  vs.  Oppenheimer Strategic Income

Lord Abbett Inflation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Inflation are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Lord Abbett is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Strategic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Strategic Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lord Abbett and Oppenheimer Strategic

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

The idea behind Lord Abbett Inflation and Oppenheimer Strategic Income 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.