Correlation Between Oppenheimer Gbl and Marsico 21st

Can any of the company-specific risk be diversified away by investing in both Oppenheimer Gbl and Marsico 21st 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 Gbl and Marsico 21st into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Oppenheimer Gbl Value and Marsico 21st Century, you can compare the effects of market volatilities on Oppenheimer Gbl and Marsico 21st 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 Gbl with a short position of Marsico 21st. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Gbl and Marsico 21st.

Diversification Opportunities for Oppenheimer Gbl and Marsico 21st

0.88

Correlation Coefficient

Oppenheimer Gbl  Marsico 21st

Very poor diversification

The 3 months correlation between Oppenheimer and Marsico is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Gbl Value and Marsico 21st Century in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marsico 21st Century and Oppenheimer Gbl 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 Gbl Value are associated (or correlated) with Marsico 21st. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marsico 21st Century has no effect on the direction of Oppenheimer Gbl i.e., Oppenheimer Gbl and Marsico 21st go up and down completely randomly.

Pair Corralation between Oppenheimer Gbl and Marsico 21st

Assuming the 90 days horizon Oppenheimer Gbl Value is expected to under-perform the Marsico 21st. In addition to that, Oppenheimer Gbl is 1.12 times more volatile than Marsico 21st Century. It trades about -0.15 of its total potential returns per unit of risk. Marsico 21st Century is currently generating about -0.05 per unit of volatility. If you would invest  4,249  in Marsico 21st Century on February 6, 2024 and sell it today you would lose (56.00) from holding Marsico 21st Century or give up 1.32% of portfolio value over 90 days.

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

Oppenheimer Gbl Value  vs.  Marsico 21st Century

Oppenheimer Gbl Value

Risk-Adjusted Performance

3 of 100

Insignificant

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

Marsico 21st Century

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Marsico 21st Century are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Marsico 21st may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Oppenheimer Gbl and Marsico 21st

The main advantage of trading using opposite Oppenheimer Gbl and Marsico 21st positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Gbl position performs unexpectedly, Marsico 21st 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 Marsico 21st will offset losses from the drop in Marsico 21st's long position.

The idea behind Oppenheimer Gbl Value and Marsico 21st Century 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.