Correlation Between First Eagle and Oppenheimer Gold
Can any of the company-specific risk be diversified away by investing in both First Eagle 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 First Eagle and Oppenheimer Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Eagle Gold and Oppenheimer Gold Special, you can compare the effects of market volatilities on First Eagle 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 First Eagle with a short position of Oppenheimer Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Eagle and Oppenheimer Gold.
Diversification Opportunities for First Eagle and Oppenheimer Gold
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between First and Oppenheimer is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding First Eagle Gold 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 First Eagle 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 First Eagle Gold 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 First Eagle i.e., First Eagle and Oppenheimer Gold go up and down completely randomly.
Pair Corralation between First Eagle and Oppenheimer Gold
Assuming the 90 days horizon First Eagle Gold is expected to generate 1.07 times more return on investment than Oppenheimer Gold. However, First Eagle is 1.07 times more volatile than Oppenheimer Gold Special. It trades about 0.3 of its potential returns per unit of risk. Oppenheimer Gold Special is currently generating about 0.29 per unit of risk. If you would invest 2,365 in First Eagle Gold on January 25, 2024 and sell it today you would earn a total of 243.00 from holding First Eagle Gold or generate 10.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Eagle Gold vs. Oppenheimer Gold Special
Performance |
| Timeline |
| First Eagle Gold |
| Oppenheimer Gold Special |
First Eagle and Oppenheimer Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Eagle and Oppenheimer Gold
The main advantage of trading using opposite First Eagle and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Eagle 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 First Eagle Gold 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.| Oppenheimer Gold vs. Invesco Municipal Income | Oppenheimer Gold vs. Invesco Municipal Income | Oppenheimer Gold vs. Invesco Municipal Income | Oppenheimer Gold vs. Oppenheimer Rising Dividends |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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