Correlation Between Oppenheimer Moderate and Invesco Multi

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

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

Diversification Opportunities for Oppenheimer Moderate and Invesco Multi

0.86

Correlation Coefficient

Oppenheimer Moderate  Invesco Multi

Very poor diversification

The 3 months correlation between Oppenheimer and Invesco is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Moderate Invstr and Invesco Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Multi Asset and Oppenheimer Moderate 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 Oppenheimer Moderate Invstr are associated (or correlated) with Invesco Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Multi Asset has no effect on the direction of Oppenheimer Moderate i.e., Oppenheimer Moderate and Invesco Multi go up and down completely randomly.

Pair Corralation between Oppenheimer Moderate and Invesco Multi

Assuming the 90 days horizon Oppenheimer Moderate Invstr is expected to generate 1.41 times more return on investment than Invesco Multi. However, Oppenheimer Moderate is 1.41 times more volatile than Invesco Multi Asset Income. It trades about 0.03 of its potential returns per unit of risk. Invesco Multi Asset Income is currently generating about -0.04 per unit of risk. If you would invest  1,087  in Oppenheimer Moderate Invstr on October 22, 2024 and sell it today you would earn a total of  11.00  from holding Oppenheimer Moderate Invstr or generate 1.01% return on investment over 90 days.

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

Oppenheimer Moderate Invstr  vs.  Invesco Multi Asset Income

Oppenheimer Moderate

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Moderate Invstr are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Oppenheimer Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Multi Asset Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Invesco Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oppenheimer Moderate and Invesco Multi

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

The idea behind Oppenheimer Moderate Invstr and Invesco Multi Asset 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.