Correlation Between Siit Large and Oppenheimer Gold

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

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

Diversification Opportunities for Siit Large and Oppenheimer Gold

0.15

Correlation Coefficient

Siit Large  Oppenheimer Gold

Average diversification

The 3 months correlation between Siit and Oppenheimer is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Oppenheimer Gold Spec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Gold Spec and Siit Large 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 Siit Large Cap 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 Spec has no effect on the direction of Siit Large i.e., Siit Large and Oppenheimer Gold go up and down completely randomly.

Pair Corralation between Siit Large and Oppenheimer Gold

Assuming the 90 days horizon Siit Large Cap is expected to under-perform the Oppenheimer Gold. In addition to that, Siit Large is 1.35 times more volatile than Oppenheimer Gold Spec. It trades about -0.11 of its total potential returns per unit of risk. Oppenheimer Gold Spec is currently generating about 0.03 per unit of volatility. If you would invest  2,793  in Oppenheimer Gold Spec on December 1, 2024 and sell it today you would earn a total of  76.00  from holding Oppenheimer Gold Spec or generate 2.72% return on investment over 90 days.

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

Siit Large Cap  vs.  Oppenheimer Gold Spec

Siit Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siit Large Cap 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 April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Oppenheimer Gold Spec

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Gold Spec are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Siit Large and Oppenheimer Gold

The main advantage of trading using opposite Siit Large and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large 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 Siit Large Cap and Oppenheimer Gold Spec 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.