Correlation Between Vanguard Small-cap and Oppenheimer Main
Can any of the company-specific risk be diversified away by investing in both Vanguard Small-cap 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 Vanguard Small-cap and Oppenheimer Main into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Small Cap Index and Oppenheimer Main Street, you can compare the effects of market volatilities on Vanguard Small-cap 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 Vanguard Small-cap with a short position of Oppenheimer Main. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Small-cap and Oppenheimer Main.
Diversification Opportunities for Vanguard Small-cap and Oppenheimer Main
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Oppenheimer is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Small Cap Index and Oppenheimer Main Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Main Street and Vanguard Small-cap 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 Vanguard Small Cap Index 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 Street has no effect on the direction of Vanguard Small-cap i.e., Vanguard Small-cap and Oppenheimer Main go up and down completely randomly.
Pair Corralation between Vanguard Small-cap and Oppenheimer Main
Assuming the 90 days horizon Vanguard Small-cap is expected to generate 1.21 times less return on investment than Oppenheimer Main. But when comparing it to its historical volatility, Vanguard Small Cap Index is 1.06 times less risky than Oppenheimer Main. It trades about 0.08 of its potential returns per unit of risk. Oppenheimer Main Street is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,076 in Oppenheimer Main Street on June 2, 2024 and sell it today you would earn a total of 141.00 from holding Oppenheimer Main Street or generate 6.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Vanguard Small Cap Index vs. Oppenheimer Main Street
Performance |
Timeline |
Vanguard Small Cap |
Oppenheimer Main Street |
Vanguard Small-cap and Oppenheimer Main Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vanguard Small-cap and Oppenheimer Main
The main advantage of trading using opposite Vanguard Small-cap and Oppenheimer Main positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Small-cap 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.Vanguard Small-cap vs. Vanguard Explorer Value | Vanguard Small-cap vs. Vanguard Strategic Equity | Vanguard Small-cap vs. Vanguard Diversified Equity | Vanguard Small-cap vs. Vanguard Mid Cap |
Oppenheimer Main vs. Oppenheimer Intl Small | Oppenheimer Main vs. Oppenheimer Global Strtgc | Oppenheimer Main vs. Oppenheimer Strat Incm | Oppenheimer Main vs. Oppenheimer Strategic Income |
Check out your portfolio center.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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