Correlation Between Mainstay Epoch and Oppenheimer Gold

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

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

Diversification Opportunities for Mainstay Epoch and Oppenheimer Gold

0.7

Correlation Coefficient

Mainstay Epoch  Oppenheimer Gold

Poor diversification

The 3 months correlation between Mainstay and Oppenheimer is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Epoch Global 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 Mainstay Epoch 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 Mainstay Epoch Global 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 Mainstay Epoch i.e., Mainstay Epoch and Oppenheimer Gold go up and down completely randomly.

Pair Corralation between Mainstay Epoch and Oppenheimer Gold

Assuming the 90 days horizon Mainstay Epoch Global is expected to under-perform the Oppenheimer Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mainstay Epoch Global is 1.8 times less risky than Oppenheimer Gold. The mutual fund trades about -0.16 of its potential returns per unit of risk. The Oppenheimer Gold Special is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,560  in Oppenheimer Gold Special on October 5, 2024 and sell it today you would lose (210.00) from holding Oppenheimer Gold Special or give up 8.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Mainstay Epoch Global  vs.  Oppenheimer Gold Special

Mainstay Epoch Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mainstay Epoch Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Oppenheimer Gold Special

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Gold Special has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Mainstay Epoch and Oppenheimer Gold

The main advantage of trading using opposite Mainstay Epoch and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Epoch 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 Mainstay Epoch Global 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 Transaction History module to view history of all your transactions and understand their impact on performance.