Correlation Between Gold Portfolio and Oppenheimer Gold

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

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

Diversification Opportunities for Gold Portfolio and Oppenheimer Gold

0.99

Correlation Coefficient

Gold Portfolio  Oppenheimer Gold

No risk reduction

The 3 months correlation between Gold and Oppenheimer is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Gold Portfolio Gold 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 Gold Portfolio 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 Gold Portfolio Gold 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 Gold Portfolio i.e., Gold Portfolio and Oppenheimer Gold go up and down completely randomly.

Pair Corralation between Gold Portfolio and Oppenheimer Gold

Assuming the 90 days horizon Gold Portfolio Gold is expected to generate 0.99 times more return on investment than Oppenheimer Gold. However, Gold Portfolio Gold is 1.01 times less risky than Oppenheimer Gold. It trades about 0.31 of its potential returns per unit of risk. Oppenheimer Gold Special is currently generating about 0.25 per unit of risk. If you would invest  2,442  in Gold Portfolio Gold on December 30, 2024 and sell it today you would earn a total of  831.00  from holding Gold Portfolio Gold or generate 34.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Gold Portfolio Gold  vs.  Oppenheimer Gold Special

Gold Portfolio Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Portfolio Gold are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Gold Portfolio showed solid returns over the last few months and may actually be approaching a breakup point.

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 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Oppenheimer Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gold Portfolio and Oppenheimer Gold

The main advantage of trading using opposite Gold Portfolio and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Portfolio 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 Gold Portfolio Gold 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.

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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.