Correlation Between Oppenheimer Rochester and Lord Abbett

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

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

Diversification Opportunities for Oppenheimer Rochester and Lord Abbett

-0.25

Correlation Coefficient

Oppenheimer Rochester  Lord Abbett

Very good diversification

The 3 months correlation between Oppenheimer and Lord is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Rochester Ltd and Lord Abbett Affiliated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Affiliated and Oppenheimer Rochester 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 Rochester Ltd are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Affiliated has no effect on the direction of Oppenheimer Rochester i.e., Oppenheimer Rochester and Lord Abbett go up and down completely randomly.

Pair Corralation between Oppenheimer Rochester and Lord Abbett

Assuming the 90 days horizon Oppenheimer Rochester Ltd is expected to generate 0.19 times more return on investment than Lord Abbett. However, Oppenheimer Rochester Ltd is 5.2 times less risky than Lord Abbett. It trades about 0.03 of its potential returns per unit of risk. Lord Abbett Affiliated is currently generating about 0.0 per unit of risk. If you would invest  309.00  in Oppenheimer Rochester Ltd on December 23, 2024 and sell it today you would earn a total of  1.00  from holding Oppenheimer Rochester Ltd or generate 0.32% return on investment over 90 days.

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

Oppenheimer Rochester Ltd  vs.  Lord Abbett Affiliated

Oppenheimer Rochester

Risk-Adjusted Performance

Weak

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

Lord Abbett Affiliated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lord Abbett Affiliated has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Lord Abbett 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 Rochester and Lord Abbett

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

The idea behind Oppenheimer Rochester Ltd and Lord Abbett Affiliated 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.