Correlation Between Oppenheimer Target and Invesco International

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

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

Diversification Opportunities for Oppenheimer Target and Invesco International

-0.4

Correlation Coefficient

Oppenheimer Target  Invesco International

Very good diversification

The 3 months correlation between Oppenheimer and Invesco is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Target and Invesco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International and Oppenheimer Target 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 Target are associated (or correlated) with Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Oppenheimer Target i.e., Oppenheimer Target and Invesco International go up and down completely randomly.

Pair Corralation between Oppenheimer Target and Invesco International

Assuming the 90 days horizon Oppenheimer Target is expected to generate 0.85 times more return on investment than Invesco International. However, Oppenheimer Target is 1.18 times less risky than Invesco International. It trades about -0.12 of its potential returns per unit of risk. Invesco International Growth is currently generating about -0.23 per unit of risk. If you would invest  4,423  in Oppenheimer Target on September 24, 2024 and sell it today you would lose (169.00) from holding Oppenheimer Target or give up 3.82% of portfolio value over 90 days.

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

Oppenheimer Target  vs.  Invesco International Growth

Oppenheimer Target

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Target are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Oppenheimer Target is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Oppenheimer Target and Invesco International

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

The idea behind Oppenheimer Target and Invesco International Growth 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.