Correlation Between Oppenheimer Intl and Goldman Sachs

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

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

Diversification Opportunities for Oppenheimer Intl and Goldman Sachs

0.87

Correlation Coefficient

Oppenheimer Intl  Goldman Sachs

Very poor diversification

The 3 months correlation between Oppenheimer and Goldman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Intl Small and Goldman Sachs Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Inflation and Oppenheimer Intl 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 Oppenheimer Intl Small are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Inflation has no effect on the direction of Oppenheimer Intl i.e., Oppenheimer Intl and Goldman Sachs go up and down completely randomly.

Pair Corralation between Oppenheimer Intl and Goldman Sachs

Assuming the 90 days horizon Oppenheimer Intl Small is expected to under-perform the Goldman Sachs. In addition to that, Oppenheimer Intl is 5.77 times more volatile than Goldman Sachs Inflation. It trades about -0.17 of its total potential returns per unit of risk. Goldman Sachs Inflation is currently generating about -0.11 per unit of volatility. If you would invest  976.00  in Goldman Sachs Inflation on September 14, 2024 and sell it today you would lose (18.00) from holding Goldman Sachs Inflation or give up 1.84% of portfolio value over 90 days.

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

Oppenheimer Intl Small  vs.  Goldman Sachs Inflation

Oppenheimer Intl Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oppenheimer Intl Small 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 January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Goldman Sachs Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Inflation has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Oppenheimer Intl and Goldman Sachs

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

The idea behind Oppenheimer Intl Small and Goldman Sachs Inflation 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.