Correlation Between Firsthand Technology and Oppenheimer Global

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

By analyzing existing cross correlation between Firsthand Technology Opportunities and Oppenheimer Global Allocation, you can compare the effects of market volatilities on Firsthand Technology and Oppenheimer Global 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 Firsthand Technology with a short position of Oppenheimer Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Technology and Oppenheimer Global.

Diversification Opportunities for Firsthand Technology and Oppenheimer Global

0.76

Correlation Coefficient

Firsthand Technology  Oppenheimer Global

Poor diversification

The 3 months correlation between Firsthand and Oppenheimer is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni and Oppenheimer Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Global and Firsthand Technology 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 Firsthand Technology Opportunities are associated (or correlated) with Oppenheimer Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Global has no effect on the direction of Firsthand Technology i.e., Firsthand Technology and Oppenheimer Global go up and down completely randomly.

Pair Corralation between Firsthand Technology and Oppenheimer Global

Assuming the 90 days horizon Firsthand Technology Opportunities is expected to generate 3.21 times more return on investment than Oppenheimer Global. However, Firsthand Technology is 3.21 times more volatile than Oppenheimer Global Allocation. It trades about 0.08 of its potential returns per unit of risk. Oppenheimer Global Allocation is currently generating about 0.06 per unit of risk. If you would invest  351.00  in Firsthand Technology Opportunities on October 26, 2024 and sell it today you would earn a total of  56.00  from holding Firsthand Technology Opportunities or generate 15.95% return on investment over 90 days.

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

Firsthand Technology Opportuni  vs.  Oppenheimer Global Allocation

Firsthand Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Firsthand Technology Opportunities are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Firsthand Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Oppenheimer Global

Risk-Adjusted Performance

2 of 100

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.

Pair Trading with Firsthand Technology and Oppenheimer Global

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

The idea behind Firsthand Technology Opportunities and Oppenheimer Global Allocation 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.