Correlation Between Goldman Sachs and Oppenheimer Value

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

By analyzing existing cross correlation between Goldman Sachs Short Term and Oppenheimer Value Fd, you can compare the effects of market volatilities on Goldman Sachs and Oppenheimer Value 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 Goldman Sachs with a short position of Oppenheimer Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Oppenheimer Value.

Diversification Opportunities for Goldman Sachs and Oppenheimer Value

-0.52

Correlation Coefficient

Goldman Sachs  Oppenheimer Value

Excellent diversification

The 3 months correlation between Goldman and Oppenheimer is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short Term and Oppenheimer Value Fd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Value and Goldman Sachs 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 Goldman Sachs Short Term are associated (or correlated) with Oppenheimer Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Value has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Oppenheimer Value go up and down completely randomly.

Pair Corralation between Goldman Sachs and Oppenheimer Value

Assuming the 90 days horizon Goldman Sachs Short Term is expected to generate 0.04 times more return on investment than Oppenheimer Value. However, Goldman Sachs Short Term is 24.94 times less risky than Oppenheimer Value. It trades about 0.21 of its potential returns per unit of risk. Oppenheimer Value Fd is currently generating about -0.13 per unit of risk. If you would invest  1,002  in Goldman Sachs Short Term on November 29, 2024 and sell it today you would earn a total of  9.00  from holding Goldman Sachs Short Term or generate 0.9% return on investment over 90 days.

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

Goldman Sachs Short Term  vs.  Oppenheimer Value Fd

Goldman Sachs Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Short Term are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oppenheimer Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oppenheimer Value Fd 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 forward indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Goldman Sachs and Oppenheimer Value

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

The idea behind Goldman Sachs Short Term and Oppenheimer Value Fd 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.