Correlation Between Moelis and Oppenheimer Holdings

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

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

Diversification Opportunities for Moelis and Oppenheimer Holdings

0.77

Correlation Coefficient

Moelis  Oppenheimer Holdings

Poor diversification

The 3 months correlation between Moelis and Oppenheimer is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Moelis Co and Oppenheimer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Holdings and Moelis 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 Moelis 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 Moelis i.e., Moelis and Oppenheimer Holdings go up and down completely randomly.

Pair Corralation between Moelis and Oppenheimer Holdings

Allowing for the 90-day total investment horizon Moelis Co is expected to under-perform the Oppenheimer Holdings. In addition to that, Moelis is 1.07 times more volatile than Oppenheimer Holdings. It trades about -0.17 of its total potential returns per unit of risk. Oppenheimer Holdings is currently generating about -0.06 per unit of volatility. If you would invest  6,467  in Oppenheimer Holdings on December 29, 2024 and sell it today you would lose (549.00) from holding Oppenheimer Holdings or give up 8.49% of portfolio value over 90 days.

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

Moelis Co  vs.  Oppenheimer Holdings

Moelis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moelis Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Oppenheimer Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oppenheimer Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Moelis and Oppenheimer Holdings

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

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.