Correlation Between Oppenheimer Strategic and Lord Abbett

Can any of the company-specific risk be diversified away by investing in both Oppenheimer Strategic 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 Strategic 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 Strategic Income and Lord Abbett Inflation, you can compare the effects of market volatilities on Oppenheimer Strategic 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 Strategic with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Strategic and Lord Abbett.

Diversification Opportunities for Oppenheimer Strategic and Lord Abbett

0.95

Correlation Coefficient

Oppenheimer Strategic  Lord Abbett

Almost no diversification

The 3 months correlation between Oppenheimer and Lord is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Strategic Income and Lord Abbett Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Inflation and Oppenheimer Strategic 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 Strategic Income 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 Inflation has no effect on the direction of Oppenheimer Strategic i.e., Oppenheimer Strategic and Lord Abbett go up and down completely randomly.

Pair Corralation between Oppenheimer Strategic and Lord Abbett

Assuming the 90 days horizon Oppenheimer Strategic Income is expected to generate 1.84 times more return on investment than Lord Abbett. However, Oppenheimer Strategic is 1.84 times more volatile than Lord Abbett Inflation. It trades about 0.19 of its potential returns per unit of risk. Lord Abbett Inflation is currently generating about 0.32 per unit of risk. If you would invest  304.00  in Oppenheimer Strategic Income on December 30, 2024 and sell it today you would earn a total of  10.00  from holding Oppenheimer Strategic Income or generate 3.29% return on investment over 90 days.

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

Oppenheimer Strategic Income  vs.  Lord Abbett Inflation

Oppenheimer Strategic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Strategic Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lord Abbett Inflation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lord Abbett Inflation are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic 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 Strategic and Lord Abbett

The main advantage of trading using opposite Oppenheimer Strategic and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Strategic 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 Strategic Income and Lord Abbett Inflation 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.