Correlation Between Columbia Large and Oppenheimer Gold

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

By analyzing existing cross correlation between Columbia Large Cap and Oppenheimer Gold Special, you can compare the effects of market volatilities on Columbia Large and Oppenheimer Gold 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 Columbia Large with a short position of Oppenheimer Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Large and Oppenheimer Gold.

Diversification Opportunities for Columbia Large and Oppenheimer Gold

-0.62

Correlation Coefficient

Columbia Large  Oppenheimer Gold

Excellent diversification

The 3 months correlation between Columbia and Oppenheimer is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Large Cap and Oppenheimer Gold Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Gold Special and Columbia Large 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 Columbia Large Cap are associated (or correlated) with Oppenheimer Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Gold Special has no effect on the direction of Columbia Large i.e., Columbia Large and Oppenheimer Gold go up and down completely randomly.

Pair Corralation between Columbia Large and Oppenheimer Gold

Assuming the 90 days horizon Columbia Large Cap is expected to under-perform the Oppenheimer Gold. In addition to that, Columbia Large is 1.06 times more volatile than Oppenheimer Gold Special. It trades about -0.14 of its total potential returns per unit of risk. Oppenheimer Gold Special is currently generating about 0.22 per unit of volatility. If you would invest  2,307  in Oppenheimer Gold Special on December 24, 2024 and sell it today you would earn a total of  522.00  from holding Oppenheimer Gold Special or generate 22.63% return on investment over 90 days.

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

Columbia Large Cap  vs.  Oppenheimer Gold Special

Columbia Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Oppenheimer Gold Special

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Gold Special are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Oppenheimer Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Columbia Large and Oppenheimer Gold

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

The idea behind Columbia Large Cap and Oppenheimer Gold Special 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.