Correlation Between Oppenheimer Global and Vela Large

Can any of the company-specific risk be diversified away by investing in both Oppenheimer Global and Vela Large 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 Vela Large 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 Vela Large Cap, you can compare the effects of market volatilities on Oppenheimer Global and Vela Large 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 Vela Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Global and Vela Large.

Diversification Opportunities for Oppenheimer Global and Vela Large

0.62

Correlation Coefficient

Oppenheimer Global  Vela Large

Poor diversification

The 3 months correlation between Oppenheimer and Vela is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Global Allocation and Vela Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vela Large Cap 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 Vela Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vela Large Cap has no effect on the direction of Oppenheimer Global i.e., Oppenheimer Global and Vela Large go up and down completely randomly.

Pair Corralation between Oppenheimer Global and Vela Large

Assuming the 90 days horizon Oppenheimer Global Allocation is expected to generate 0.57 times more return on investment than Vela Large. However, Oppenheimer Global Allocation is 1.76 times less risky than Vela Large. It trades about -0.08 of its potential returns per unit of risk. Vela Large Cap is currently generating about -0.1 per unit of risk. If you would invest  1,992  in Oppenheimer Global Allocation on October 8, 2024 and sell it today you would lose (51.00) from holding Oppenheimer Global Allocation or give up 2.56% of portfolio value over 90 days.

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

Oppenheimer Global Allocation  vs.  Vela Large Cap

Oppenheimer Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Global Allocation has generated negative risk-adjusted returns adding no value to fund investors. 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.

Vela Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vela Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vela Large 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 Global and Vela Large

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

The idea behind Oppenheimer Global Allocation and Vela Large Cap 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..