Correlation Between Thornburg Developing and Oppenheimer Global

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

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

Diversification Opportunities for Thornburg Developing and Oppenheimer Global

0.36

Correlation Coefficient

Thornburg Developing  Oppenheimer Global

Weak diversification

The 3 months correlation between Thornburg and Oppenheimer is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Developing World and Oppenheimer Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Global and Thornburg Developing 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 Thornburg Developing World 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 Thornburg Developing i.e., Thornburg Developing and Oppenheimer Global go up and down completely randomly.

Pair Corralation between Thornburg Developing and Oppenheimer Global

Assuming the 90 days horizon Thornburg Developing World is expected to generate 0.48 times more return on investment than Oppenheimer Global. However, Thornburg Developing World is 2.09 times less risky than Oppenheimer Global. It trades about 0.08 of its potential returns per unit of risk. Oppenheimer Global is currently generating about -0.04 per unit of risk. If you would invest  2,218  in Thornburg Developing World on September 15, 2024 and sell it today you would earn a total of  91.00  from holding Thornburg Developing World or generate 4.1% return on investment over 90 days.

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

Thornburg Developing World  vs.  Oppenheimer Global

Thornburg Developing

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thornburg Developing World are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Thornburg Developing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Thornburg Developing and Oppenheimer Global

The main advantage of trading using opposite Thornburg Developing and Oppenheimer Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Developing 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 Thornburg Developing World and Oppenheimer Global 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.