Correlation Between Oppenheimer International and Oppenheimer Strategic

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

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

Diversification Opportunities for Oppenheimer International and Oppenheimer Strategic

0.89

Correlation Coefficient

Oppenheimer International  Oppenheimer Strategic

Very poor diversification

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

Pair Corralation between Oppenheimer International and Oppenheimer Strategic

Assuming the 90 days horizon Oppenheimer International Small is expected to under-perform the Oppenheimer Strategic. In addition to that, Oppenheimer International is 2.5 times more volatile than Oppenheimer Strategic Income. It trades about -0.1 of its total potential returns per unit of risk. Oppenheimer Strategic Income is currently generating about -0.03 per unit of volatility. If you would invest  312.00  in Oppenheimer Strategic Income on September 2, 2024 and sell it today you would lose (2.00) from holding Oppenheimer Strategic Income or give up 0.64% of portfolio value over 90 days.

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

Oppenheimer International Smal  vs.  Oppenheimer Strategic Income

Oppenheimer International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Oppenheimer Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Strategic Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Oppenheimer Strategic 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 International and Oppenheimer Strategic

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

The idea behind Oppenheimer International Small and Oppenheimer Strategic 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..