Correlation Between New Perspective and Oppenheimer Glabal

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Can any of the company-specific risk be diversified away by investing in both New Perspective and Oppenheimer Glabal 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 New Perspective and Oppenheimer Glabal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Perspective Fund and Oppenheimer Glabal A, you can compare the effects of market volatilities on New Perspective and Oppenheimer Glabal 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 New Perspective with a short position of Oppenheimer Glabal. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Perspective and Oppenheimer Glabal.

Diversification Opportunities for New Perspective and Oppenheimer Glabal

0.98
  Correlation Coefficient

Almost no diversification

The 3 months correlation between New and Oppenheimer is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding NEW PERSPECTIVE FUND and Oppenheimer Glabal A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Glabal and New Perspective 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 New Perspective Fund are associated (or correlated) with Oppenheimer Glabal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Glabal has no effect on the direction of New Perspective i.e., New Perspective and Oppenheimer Glabal go up and down completely randomly.

Pair Corralation between New Perspective and Oppenheimer Glabal

Assuming the 90 days horizon New Perspective Fund is expected to generate 0.78 times more return on investment than Oppenheimer Glabal. However, New Perspective Fund is 1.28 times less risky than Oppenheimer Glabal. It trades about 0.18 of its potential returns per unit of risk. Oppenheimer Glabal A is currently generating about 0.11 per unit of risk. If you would invest  5,909  in New Perspective Fund on December 29, 2023 and sell it today you would earn a total of  160.00  from holding New Perspective Fund or generate 2.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

NEW PERSPECTIVE FUND  vs.  Oppenheimer Glabal A

 Performance 
       Timeline  
New Perspective Fund 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in New Perspective Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, New Perspective may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Oppenheimer Glabal 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Glabal A are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Oppenheimer Glabal may actually be approaching a critical reversion point that can send shares even higher in April 2024.

New Perspective and Oppenheimer Glabal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with New Perspective and Oppenheimer Glabal

The main advantage of trading using opposite New Perspective and Oppenheimer Glabal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Perspective position performs unexpectedly, Oppenheimer Glabal 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 Glabal will offset losses from the drop in Oppenheimer Glabal's long position.
The idea behind New Perspective Fund and Oppenheimer Glabal A 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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