Correlation Between Oppenheimer Main and Oppenheimer Roc

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

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

Diversification Opportunities for Oppenheimer Main and Oppenheimer Roc

-0.52

Correlation Coefficient

Oppenheimer Main  Oppenheimer Roc

Excellent diversification

The 3 months correlation between Oppenheimer and Oppenheimer is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Main Street and Oppenheimer Roc Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Roc and Oppenheimer Main 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 Main Street are associated (or correlated) with Oppenheimer Roc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Roc has no effect on the direction of Oppenheimer Main i.e., Oppenheimer Main and Oppenheimer Roc go up and down completely randomly.

Pair Corralation between Oppenheimer Main and Oppenheimer Roc

Assuming the 90 days horizon Oppenheimer Main Street is expected to under-perform the Oppenheimer Roc. In addition to that, Oppenheimer Main is 5.29 times more volatile than Oppenheimer Roc Limited. It trades about -0.05 of its total potential returns per unit of risk. Oppenheimer Roc Limited is currently generating about 0.03 per unit of volatility. If you would invest  309.00  in Oppenheimer Roc Limited on December 25, 2024 and sell it today you would earn a total of  1.00  from holding Oppenheimer Roc Limited or generate 0.32% return on investment over 90 days.

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

Oppenheimer Main Street  vs.  Oppenheimer Roc Limited

Oppenheimer Main Street

Risk-Adjusted Performance

Very Weak

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

Oppenheimer Roc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Roc Limited 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 Roc 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 Main and Oppenheimer Roc

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

The idea behind Oppenheimer Main Street and Oppenheimer Roc Limited 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.