Correlation Between Tax-managed and Oppenheimer Intl

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

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

Diversification Opportunities for Tax-managed and Oppenheimer Intl

0.2

Correlation Coefficient

Tax-managed  Oppenheimer Intl

Modest diversification

The 3 months correlation between Tax-managed and Oppenheimer is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tax Managed Mid Small and Oppenheimer Intl Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Intl Small and Tax-managed 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 Tax Managed Mid Small are associated (or correlated) with Oppenheimer Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Intl Small has no effect on the direction of Tax-managed i.e., Tax-managed and Oppenheimer Intl go up and down completely randomly.

Pair Corralation between Tax-managed and Oppenheimer Intl

Assuming the 90 days horizon Tax Managed Mid Small is expected to generate 0.6 times more return on investment than Oppenheimer Intl. However, Tax Managed Mid Small is 1.65 times less risky than Oppenheimer Intl. It trades about -0.19 of its potential returns per unit of risk. Oppenheimer Intl Small is currently generating about -0.2 per unit of risk. If you would invest  4,558  in Tax Managed Mid Small on October 10, 2024 and sell it today you would lose (358.00) from holding Tax Managed Mid Small or give up 7.85% of portfolio value over 90 days.

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

Tax Managed Mid Small  vs.  Oppenheimer Intl Small

Tax Managed Mid

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Tax-managed and Oppenheimer Intl

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

The idea behind Tax Managed Mid Small and Oppenheimer Intl Small 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.