Correlation Between Fidelity Advisor and Oppenheimer Gold

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

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

Diversification Opportunities for Fidelity Advisor and Oppenheimer Gold

1.0

Correlation Coefficient

Fidelity Advisor  Oppenheimer Gold

No risk reduction

The 3 months correlation between Fidelity and Oppenheimer is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Advisor Gold 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 Fidelity Advisor 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 Fidelity Advisor 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 Spec has no effect on the direction of Fidelity Advisor i.e., Fidelity Advisor and Oppenheimer Gold go up and down completely randomly.

Pair Corralation between Fidelity Advisor and Oppenheimer Gold

Assuming the 90 days horizon Fidelity Advisor Gold is expected to generate 1.11 times more return on investment than Oppenheimer Gold. However, Fidelity Advisor is 1.11 times more volatile than Oppenheimer Gold Spec. It trades about 0.29 of its potential returns per unit of risk. Oppenheimer Gold Spec is currently generating about 0.28 per unit of risk. If you would invest  2,141  in Fidelity Advisor Gold on January 26, 2024 and sell it today you would earn a total of  219.00  from holding Fidelity Advisor Gold or generate 10.23% return on investment over 90 days.

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

Fidelity Advisor Gold  vs.  Oppenheimer Gold Spec

Fidelity Advisor Gold

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Gold are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Fidelity Advisor showed solid returns over the last few months and may actually be approaching a breakup point.

Oppenheimer Gold Spec

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Gold Spec are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Oppenheimer Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity Advisor and Oppenheimer Gold

The main advantage of trading using opposite Fidelity Advisor and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Advisor 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 Fidelity Advisor Gold 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.