Correlation Between Oppenheimer Intl and International Smaller

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

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

Diversification Opportunities for Oppenheimer Intl and International Smaller

0.88

Correlation Coefficient

Oppenheimer Intl  International Smaller

Very poor diversification

The 3 months correlation between Oppenheimer and International is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Intl Small and The International Smaller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The International Smaller and Oppenheimer Intl 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 Intl Small are associated (or correlated) with International Smaller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The International Smaller has no effect on the direction of Oppenheimer Intl i.e., Oppenheimer Intl and International Smaller go up and down completely randomly.

Pair Corralation between Oppenheimer Intl and International Smaller

Assuming the 90 days horizon Oppenheimer Intl Small is expected to under-perform the International Smaller. But the mutual fund apears to be less risky and, when comparing its historical volatility, Oppenheimer Intl Small is 1.62 times less risky than International Smaller. The mutual fund trades about -0.11 of its potential returns per unit of risk. The The International Smaller is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,253  in The International Smaller on September 13, 2024 and sell it today you would lose (9.00) from holding The International Smaller or give up 0.72% of portfolio value over 90 days.

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

Oppenheimer Intl Small  vs.  The International Smaller

Oppenheimer Intl Small

Risk-Adjusted Performance

0 of 100

Very Weak

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

The International Smaller

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The International Smaller has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, International Smaller 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 Intl and International Smaller

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

The idea behind Oppenheimer Intl Small and The International Smaller 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.