Correlation Between Franklin Pennsylvania and Oppenheimer Roc

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

By analyzing existing cross correlation between Franklin Pennsylvania Tax Free and Oppenheimer Roc Penn, you can compare the effects of market volatilities on Franklin Pennsylvania and Oppenheimer Roc 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 Franklin Pennsylvania with a short position of Oppenheimer Roc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Pennsylvania and Oppenheimer Roc.

Diversification Opportunities for Franklin Pennsylvania and Oppenheimer Roc

0.98

Correlation Coefficient

Franklin Pennsylvania  Oppenheimer Roc

Almost no diversification

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

Pair Corralation between Franklin Pennsylvania and Oppenheimer Roc

Assuming the 90 days horizon Franklin Pennsylvania is expected to generate 1.17 times less return on investment than Oppenheimer Roc. But when comparing it to its historical volatility, Franklin Pennsylvania Tax Free is 1.05 times less risky than Oppenheimer Roc. It trades about 0.06 of its potential returns per unit of risk. Oppenheimer Roc Penn is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  980.00  in Oppenheimer Roc Penn on February 15, 2024 and sell it today you would earn a total of  47.00  from holding Oppenheimer Roc Penn or generate 4.8% return on investment over 90 days.

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

Franklin Pennsylvania Tax Free  vs.  Oppenheimer Roc Penn

Franklin Pennsylvania

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Franklin Pennsylvania Tax Free has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Franklin Pennsylvania is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Roc Penn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Roc Penn has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Oppenheimer Roc is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Franklin Pennsylvania and Oppenheimer Roc

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

The idea behind Franklin Pennsylvania Tax Free and Oppenheimer Roc Penn 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.