Correlation Between Oppenheimer Main and Oppenheimer Disciplined

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

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

Diversification Opportunities for Oppenheimer Main and Oppenheimer Disciplined

0.78

Correlation Coefficient

Oppenheimer Main  Oppenheimer Disciplined

Poor diversification

The 3 months correlation between Oppenheimer and Oppenheimer is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Main Street and Oppenheimer Disciplined Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Disciplined and Oppenheimer Main 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 Main Street are associated (or correlated) with Oppenheimer Disciplined. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Disciplined has no effect on the direction of Oppenheimer Main i.e., Oppenheimer Main and Oppenheimer Disciplined go up and down completely randomly.

Pair Corralation between Oppenheimer Main and Oppenheimer Disciplined

Assuming the 90 days horizon Oppenheimer Main Street is expected to generate 1.81 times more return on investment than Oppenheimer Disciplined. However, Oppenheimer Main is 1.81 times more volatile than Oppenheimer Disciplined Value. It trades about 0.13 of its potential returns per unit of risk. Oppenheimer Disciplined Value is currently generating about 0.19 per unit of risk. If you would invest  1,787  in Oppenheimer Main Street on February 1, 2024 and sell it today you would earn a total of  336.00  from holding Oppenheimer Main Street or generate 18.8% return on investment over 90 days.

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

Oppenheimer Main Street  vs.  Oppenheimer Disciplined Value

Oppenheimer Main Street

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Main Street are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. 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.

Oppenheimer Disciplined

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Disciplined Value are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer Disciplined 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 Main and Oppenheimer Disciplined

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

The idea behind Oppenheimer Main Street and Oppenheimer Disciplined Value 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.