Correlation Between Western Asset and Oppenheimer Main

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

By analyzing existing cross correlation between Western Asset Inflation and Oppenheimer Main Strt, you can compare the effects of market volatilities on Western Asset and Oppenheimer Main 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 Western Asset with a short position of Oppenheimer Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Oppenheimer Main.

Diversification Opportunities for Western Asset and Oppenheimer Main

-0.58

Correlation Coefficient

Western Asset  Oppenheimer Main

Excellent diversification

The 3 months correlation between Western and Oppenheimer is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Oppenheimer Main Strt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Main Strt and Western Asset 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 Western Asset Inflation are associated (or correlated) with Oppenheimer Main. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Main Strt has no effect on the direction of Western Asset i.e., Western Asset and Oppenheimer Main go up and down completely randomly.

Pair Corralation between Western Asset and Oppenheimer Main

Assuming the 90 days horizon Western Asset Inflation is expected to generate 0.26 times more return on investment than Oppenheimer Main. However, Western Asset Inflation is 3.83 times less risky than Oppenheimer Main. It trades about 0.19 of its potential returns per unit of risk. Oppenheimer Main Strt is currently generating about -0.08 per unit of risk. If you would invest  918.00  in Western Asset Inflation on December 31, 2024 and sell it today you would earn a total of  31.00  from holding Western Asset Inflation or generate 3.38% return on investment over 90 days.

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

Western Asset Inflation  vs.  Oppenheimer Main Strt

Western Asset Inflation

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset Inflation are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Western Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Main Strt

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Western Asset and Oppenheimer Main

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

The idea behind Western Asset Inflation and Oppenheimer Main Strt 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.