Correlation Between Oppenheimer Capital and Oppenheimer Value

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

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

Diversification Opportunities for Oppenheimer Capital and Oppenheimer Value

0.89

Correlation Coefficient

Oppenheimer Capital  Oppenheimer Value

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 Capital Appreciati and Oppenheimer Value Fd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Value and Oppenheimer Capital 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 Capital Appreciation are associated (or correlated) with Oppenheimer Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Value has no effect on the direction of Oppenheimer Capital i.e., Oppenheimer Capital and Oppenheimer Value go up and down completely randomly.

Pair Corralation between Oppenheimer Capital and Oppenheimer Value

Assuming the 90 days horizon Oppenheimer Capital Appreciation is expected to generate 1.19 times more return on investment than Oppenheimer Value. However, Oppenheimer Capital is 1.19 times more volatile than Oppenheimer Value Fd. It trades about 0.19 of its potential returns per unit of risk. Oppenheimer Value Fd is currently generating about 0.12 per unit of risk. If you would invest  8,956  in Oppenheimer Capital Appreciation on August 31, 2024 and sell it today you would earn a total of  1,102  from holding Oppenheimer Capital Appreciation or generate 12.3% return on investment over 90 days.

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

Oppenheimer Capital Appreciati  vs.  Oppenheimer Value Fd

Oppenheimer Capital

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Capital Appreciation are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Oppenheimer Capital may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Oppenheimer Value

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Value Fd are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Oppenheimer Value may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Oppenheimer Capital and Oppenheimer Value

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

The idea behind Oppenheimer Capital Appreciation and Oppenheimer Value Fd 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 Global Correlations module to find global opportunities by holding instruments from different markets.