Correlation Between Oppenheimer Gold and Precious Metals

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

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

Diversification Opportunities for Oppenheimer Gold and Precious Metals

0.95

Correlation Coefficient

Oppenheimer Gold  Precious Metals

Almost no diversification

The 3 months correlation between Oppenheimer and Precious is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Gold Special and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And and Oppenheimer Gold 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 Oppenheimer Gold Special are associated (or correlated) with Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Oppenheimer Gold i.e., Oppenheimer Gold and Precious Metals go up and down completely randomly.

Pair Corralation between Oppenheimer Gold and Precious Metals

Assuming the 90 days horizon Oppenheimer Gold is expected to generate 1.12 times less return on investment than Precious Metals. In addition to that, Oppenheimer Gold is 1.01 times more volatile than Precious Metals And. It trades about 0.05 of its total potential returns per unit of risk. Precious Metals And is currently generating about 0.05 per unit of volatility. If you would invest  1,534  in Precious Metals And on July 7, 2024 and sell it today you would earn a total of  672.00  from holding Precious Metals And or generate 43.81% return on investment over 90 days.

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

Oppenheimer Gold Special  vs.  Precious Metals And

Oppenheimer Gold Special

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Gold Special are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Oppenheimer Gold may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Precious Metals And

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Precious Metals may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Pair Trading with Oppenheimer Gold and Precious Metals

The main advantage of trading using opposite Oppenheimer Gold and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Gold position performs unexpectedly, Precious Metals 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 Precious Metals will offset losses from the drop in Precious Metals' long position.

The idea behind Oppenheimer Gold Special and Precious Metals And 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.