Correlation Between Blackrock and Oppenheimer Global

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

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

Diversification Opportunities for Blackrock and Oppenheimer Global

0.49

Correlation Coefficient

Blackrock  Oppenheimer Global

Very weak diversification

The 3 months correlation between Blackrock and Oppenheimer is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Pa Muni and Oppenheimer Global Strtgc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Global Strtgc and Blackrock 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 Blackrock Pa Muni are associated (or correlated) with Oppenheimer Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Global Strtgc has no effect on the direction of Blackrock i.e., Blackrock and Oppenheimer Global go up and down completely randomly.

Pair Corralation between Blackrock and Oppenheimer Global

Assuming the 90 days horizon Blackrock is expected to generate 1.92 times less return on investment than Oppenheimer Global. But when comparing it to its historical volatility, Blackrock Pa Muni is 1.48 times less risky than Oppenheimer Global. It trades about 0.03 of its potential returns per unit of risk. Oppenheimer Global Strtgc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  283.00  in Oppenheimer Global Strtgc on October 11, 2024 and sell it today you would earn a total of  26.00  from holding Oppenheimer Global Strtgc or generate 9.19% return on investment over 90 days.

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

Blackrock Pa Muni  vs.  Oppenheimer Global Strtgc

Blackrock Pa Muni

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Pa Muni has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Global Strtgc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Blackrock and Oppenheimer Global

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

The idea behind Blackrock Pa Muni and Oppenheimer Global Strtgc 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 Valuation module to check real value of public entities based on technical and fundamental data.