Correlation Between SPDR Morgan and Oppenheimer International

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

By analyzing existing cross correlation between SPDR Morgan Stanley and Oppenheimer International Growth, you can compare the effects of market volatilities on SPDR Morgan and Oppenheimer International 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 SPDR Morgan with a short position of Oppenheimer International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Morgan and Oppenheimer International.

Diversification Opportunities for SPDR Morgan and Oppenheimer International

0.86

Correlation Coefficient

SPDR Morgan  Oppenheimer International

Very poor diversification

The 24 months correlation between SPDR and Oppenheimer is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Morgan Stanley and Oppenheimer International Grow in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer International and SPDR Morgan 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 SPDR Morgan Stanley are associated (or correlated) with Oppenheimer International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer International has no effect on the direction of SPDR Morgan i.e., SPDR Morgan and Oppenheimer International go up and down completely randomly.

Pair Corralation between SPDR Morgan and Oppenheimer International

Given the investment horizon of 90 days SPDR Morgan Stanley is expected to under-perform the Oppenheimer International. In addition to that, SPDR Morgan is 1.6 times more volatile than Oppenheimer International Growth. It trades about -0.14 of its total potential returns per unit of risk. Oppenheimer International Growth is currently generating about -0.13 per unit of volatility. If you would invest  3,346  in Oppenheimer International Growth on January 29, 2024 and sell it today you would lose (80.00) from holding Oppenheimer International Growth or give up 2.39% of portfolio value over 90 days.

Time Period	24 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

SPDR Morgan Stanley  vs.  Oppenheimer International Grow

SPDR Morgan Stanley

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Morgan Stanley are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, SPDR Morgan may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Oppenheimer International

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer International Growth are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Oppenheimer International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPDR Morgan and Oppenheimer International

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

The idea behind SPDR Morgan Stanley and Oppenheimer International Growth 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.