Correlation Between Aspen Technology and Oppenheimer Russell

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Can any of the company-specific risk be diversified away by investing in both Aspen Technology and Oppenheimer Russell 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 Aspen Technology and Oppenheimer Russell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Technology and Oppenheimer Russell 1000, you can compare the effects of market volatilities on Aspen Technology and Oppenheimer Russell 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 Aspen Technology with a short position of Oppenheimer Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Technology and Oppenheimer Russell.

Diversification Opportunities for Aspen Technology and Oppenheimer Russell

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between Aspen and Oppenheimer is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Technology and Oppenheimer Russell 1000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Russell 1000 and Aspen Technology 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 Aspen Technology are associated (or correlated) with Oppenheimer Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Russell 1000 has no effect on the direction of Aspen Technology i.e., Aspen Technology and Oppenheimer Russell go up and down completely randomly.

Pair Corralation between Aspen Technology and Oppenheimer Russell

Given the investment horizon of 90 days Aspen Technology is expected to generate 2.26 times less return on investment than Oppenheimer Russell. In addition to that, Aspen Technology is 1.67 times more volatile than Oppenheimer Russell 1000. It trades about 0.06 of its total potential returns per unit of risk. Oppenheimer Russell 1000 is currently generating about 0.21 per unit of volatility. If you would invest  3,951  in Oppenheimer Russell 1000 on August 28, 2022 and sell it today you would earn a total of  530.00  from holding Oppenheimer Russell 1000 or generate 13.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Aspen Technology  vs.  Oppenheimer Russell 1000

 Performance (%) 
       Timeline  
Aspen Technology 
Aspen Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aspen Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Aspen Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Aspen Price Channel

Oppenheimer Russell 1000 
Oppenheimer Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Russell 1000 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady technical and fundamental indicators, Oppenheimer Russell is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Oppenheimer Price Channel

Aspen Technology and Oppenheimer Russell Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Aspen Technology and Oppenheimer Russell

The main advantage of trading using opposite Aspen Technology and Oppenheimer Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Technology position performs unexpectedly, Oppenheimer Russell 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 Russell will offset losses from the drop in Oppenheimer Russell's long position.
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The idea behind Aspen Technology and Oppenheimer Russell 1000 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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