Correlation Between Jefferies Financial and Oppenheimer Holdings
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial and Oppenheimer Holdings 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 Jefferies Financial and Oppenheimer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jefferies Financial Group and Oppenheimer Holdings, you can compare the effects of market volatilities on Jefferies Financial and Oppenheimer Holdings 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 Jefferies Financial with a short position of Oppenheimer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Oppenheimer Holdings.
Diversification Opportunities for Jefferies Financial and Oppenheimer Holdings
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jefferies and Oppenheimer is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Oppenheimer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Holdings and Jefferies Financial 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 Jefferies Financial Group are associated (or correlated) with Oppenheimer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Holdings has no effect on the direction of Jefferies Financial i.e., Jefferies Financial and Oppenheimer Holdings go up and down completely randomly.
Pair Corralation between Jefferies Financial and Oppenheimer Holdings
Considering the 90-day investment horizon Jefferies Financial is expected to generate 1.51 times less return on investment than Oppenheimer Holdings. But when comparing it to its historical volatility, Jefferies Financial Group is 1.1 times less risky than Oppenheimer Holdings. It trades about 0.38 of its potential returns per unit of risk. Oppenheimer Holdings is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 3,729 in Oppenheimer Holdings on February 14, 2024 and sell it today you would earn a total of 664.00 from holding Oppenheimer Holdings or generate 17.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Jefferies Financial Group vs. Oppenheimer Holdings
Performance |
Timeline |
Jefferies Financial |
Oppenheimer Holdings |
Jefferies Financial and Oppenheimer Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jefferies Financial and Oppenheimer Holdings
The main advantage of trading using opposite Jefferies Financial and Oppenheimer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial position performs unexpectedly, Oppenheimer Holdings 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 Holdings will offset losses from the drop in Oppenheimer Holdings' long position.Jefferies Financial vs. JPMorgan Chase Co | Jefferies Financial vs. Wells Fargo | Jefferies Financial vs. Citigroup | Jefferies Financial vs. American Express |
Oppenheimer Holdings vs. JPMorgan Chase Co | Oppenheimer Holdings vs. Wells Fargo | Oppenheimer Holdings vs. Citigroup | Oppenheimer Holdings vs. American Express |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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