Correlation Between Oppenheimer Global and Icon Information

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Can any of the company-specific risk be diversified away by investing in both Oppenheimer Global and Icon Information 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 Global and Icon Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oppenheimer Global Allocation and Icon Information Technology, you can compare the effects of market volatilities on Oppenheimer Global and Icon Information 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 Global with a short position of Icon Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Global and Icon Information.

Diversification Opportunities for Oppenheimer Global and Icon Information

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Oppenheimer and Icon is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Global Allocation and Icon Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Information Tec and Oppenheimer Global 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 Global Allocation are associated (or correlated) with Icon Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Information Tec has no effect on the direction of Oppenheimer Global i.e., Oppenheimer Global and Icon Information go up and down completely randomly.

Pair Corralation between Oppenheimer Global and Icon Information

Assuming the 90 days horizon Oppenheimer Global is expected to generate 1.03 times less return on investment than Icon Information. But when comparing it to its historical volatility, Oppenheimer Global Allocation is 1.99 times less risky than Icon Information. It trades about 0.06 of its potential returns per unit of risk. Icon Information Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,630  in Icon Information Technology on October 26, 2024 and sell it today you would earn a total of  61.00  from holding Icon Information Technology or generate 3.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Oppenheimer Global Allocation  vs.  Icon Information Technology

 Performance 
       Timeline  
Oppenheimer Global 

Risk-Adjusted Performance

2 of 100

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

Risk-Adjusted Performance

2 of 100

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

Oppenheimer Global and Icon Information Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oppenheimer Global and Icon Information

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

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