Correlation Between Viking Tax-free and Oppenheimer Gold

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

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

Diversification Opportunities for Viking Tax-free and Oppenheimer Gold

0.19

Correlation Coefficient

Viking Tax-free  Oppenheimer Gold

Average diversification

The 3 months correlation between Viking and Oppenheimer is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Viking Tax Free Fund 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 Viking Tax-free 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 Viking Tax Free Fund 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 Viking Tax-free i.e., Viking Tax-free and Oppenheimer Gold go up and down completely randomly.

Pair Corralation between Viking Tax-free and Oppenheimer Gold

Assuming the 90 days horizon Viking Tax Free Fund is expected to generate 0.13 times more return on investment than Oppenheimer Gold. However, Viking Tax Free Fund is 7.5 times less risky than Oppenheimer Gold. It trades about -0.4 of its potential returns per unit of risk. Oppenheimer Gold Special is currently generating about -0.17 per unit of risk. If you would invest  903.00  in Viking Tax Free Fund on October 5, 2024 and sell it today you would lose (20.00) from holding Viking Tax Free Fund or give up 2.21% of portfolio value over 90 days.

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

Viking Tax Free Fund  vs.  Oppenheimer Gold Special

Viking Tax Free

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viking Tax Free Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Viking Tax-free 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

0 of 100

Very Weak

Over the last 90 days Oppenheimer Gold Special has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Viking Tax-free and Oppenheimer Gold

The main advantage of trading using opposite Viking Tax-free and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viking Tax-free 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 Viking Tax Free Fund 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.