Correlation Between Tenneco Automotive and Invesco Oppenheimer

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

Diversification Opportunities for Tenneco Automotive and Invesco Oppenheimer

-0.15
  Correlation Coefficient

Good diversification

The 24 months correlation between Tenneco and Invesco is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tenneco Automotive and Invesco Oppenheimer Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Oppenheimer and Tenneco Automotive 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 Tenneco Automotive are associated (or correlated) with Invesco Oppenheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Oppenheimer has no effect on the direction of Tenneco Automotive i.e., Tenneco Automotive and Invesco Oppenheimer go up and down completely randomly.

Pair Corralation between Tenneco Automotive and Invesco Oppenheimer

Considering the 90-day investment horizon Tenneco Automotive is expected to generate 5.75 times more return on investment than Invesco Oppenheimer. However, Tenneco Automotive is 5.75 times more volatile than Invesco Oppenheimer Portfolio. It trades about 0.05 of its potential returns per unit of risk. Invesco Oppenheimer Portfolio is currently generating about -0.03 per unit of risk. If you would invest  873.00  in Tenneco Automotive on July 5, 2022 and sell it today you would earn a total of  887.00  from holding Tenneco Automotive or generate 101.6% return on investment over 90 days.
Time Period24 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

Tenneco Automotive  vs.  Invesco Oppenheimer Portfolio

 Performance (%) 
       Timeline  
Tenneco Automotive 
Tenneco Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Tenneco Automotive are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Tenneco Automotive disclosed solid returns over the last few months and may actually be approaching a breakup point.

Tenneco Price Channel

Invesco Oppenheimer 
Invesco Performance
0 of 100
Over the last 90 days Invesco Oppenheimer Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Invesco Oppenheimer is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Invesco Price Channel

Tenneco Automotive and Invesco Oppenheimer Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tenneco Automotive and Invesco Oppenheimer

The main advantage of trading using opposite Tenneco Automotive and Invesco Oppenheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenneco Automotive position performs unexpectedly, Invesco Oppenheimer 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 Invesco Oppenheimer will offset losses from the drop in Invesco Oppenheimer's long position.
Tenneco Automotive vs. Amazon Inc
The idea behind Tenneco Automotive and Invesco Oppenheimer Portfolio 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.
Invesco Oppenheimer 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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