Correlation Between Weitz Ultra and Oppenheimer Gold

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

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

Diversification Opportunities for Weitz Ultra and Oppenheimer Gold

0.88

Correlation Coefficient

Weitz Ultra  Oppenheimer Gold

Very poor diversification

The 3 months correlation between Weitz and Oppenheimer is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Weitz Ultra Short 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 Weitz Ultra 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 Weitz Ultra Short 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 Weitz Ultra i.e., Weitz Ultra and Oppenheimer Gold go up and down completely randomly.

Pair Corralation between Weitz Ultra and Oppenheimer Gold

Assuming the 90 days horizon Weitz Ultra is expected to generate 24.85 times less return on investment than Oppenheimer Gold. But when comparing it to its historical volatility, Weitz Ultra Short is 21.89 times less risky than Oppenheimer Gold. It trades about 0.22 of its potential returns per unit of risk. Oppenheimer Gold Special is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,263  in Oppenheimer Gold Special on December 30, 2024 and sell it today you would earn a total of  622.00  from holding Oppenheimer Gold Special or generate 27.49% return on investment over 90 days.

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

Weitz Ultra Short  vs.  Oppenheimer Gold Special

Weitz Ultra Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Weitz Ultra Short are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Weitz Ultra is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 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 Weitz Ultra and Oppenheimer Gold

The main advantage of trading using opposite Weitz Ultra and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weitz Ultra 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 Weitz Ultra Short 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.