Correlation Between Oppenheimer Rochester and Amg Gwk

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

By analyzing existing cross correlation between Oppenheimer Rochester Amt Free and Amg Gwk Municipal, you can compare the effects of market volatilities on Oppenheimer Rochester and Amg Gwk 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 Amg Gwk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Rochester and Amg Gwk.

Diversification Opportunities for Oppenheimer Rochester and Amg Gwk

0.89

Correlation Coefficient

Oppenheimer Rochester  Amg Gwk

Very poor diversification

The 3 months correlation between Oppenheimer and Amg is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Rochester Amt Free and Amg Gwk Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Gwk Municipal 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 Amt Free are associated (or correlated) with Amg Gwk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Gwk Municipal has no effect on the direction of Oppenheimer Rochester i.e., Oppenheimer Rochester and Amg Gwk go up and down completely randomly.

Pair Corralation between Oppenheimer Rochester and Amg Gwk

Assuming the 90 days horizon Oppenheimer Rochester is expected to generate 1.02 times less return on investment than Amg Gwk. In addition to that, Oppenheimer Rochester is 1.3 times more volatile than Amg Gwk Municipal. It trades about 0.04 of its total potential returns per unit of risk. Amg Gwk Municipal is currently generating about 0.05 per unit of volatility. If you would invest  1,117  in Amg Gwk Municipal on December 21, 2024 and sell it today you would earn a total of  7.00  from holding Amg Gwk Municipal or generate 0.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

Oppenheimer Rochester Amt Free  vs.  Amg Gwk Municipal

Oppenheimer Rochester

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Rochester Amt Free are ranked lower than 3 (%) 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.

Amg Gwk Municipal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amg Gwk Municipal are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Amg Gwk 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 Amg Gwk

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

The idea behind Oppenheimer Rochester Amt Free and Amg Gwk Municipal 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.