Correlation Between Oppenheimer Gold and Leggmason Partners
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Gold and Leggmason Partners 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 Leggmason Partners 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 Leggmason Partners Institutional, you can compare the effects of market volatilities on Oppenheimer Gold and Leggmason Partners 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 Leggmason Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Gold and Leggmason Partners.
Diversification Opportunities for Oppenheimer Gold and Leggmason Partners
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oppenheimer and Leggmason is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Gold Special and Leggmason Partners Institution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leggmason Partners 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 Leggmason Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leggmason Partners has no effect on the direction of Oppenheimer Gold i.e., Oppenheimer Gold and Leggmason Partners go up and down completely randomly.
Pair Corralation between Oppenheimer Gold and Leggmason Partners
Assuming the 90 days horizon Oppenheimer Gold Special is expected to generate 2.26 times more return on investment than Leggmason Partners. However, Oppenheimer Gold is 2.26 times more volatile than Leggmason Partners Institutional. It trades about 0.04 of its potential returns per unit of risk. Leggmason Partners Institutional is currently generating about 0.02 per unit of risk. If you would invest 1,940 in Oppenheimer Gold Special on August 24, 2024 and sell it today you would earn a total of 601.00 from holding Oppenheimer Gold Special or generate 30.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Oppenheimer Gold Special vs. Leggmason Partners Institution
Performance |
| Timeline |
| Oppenheimer Gold Special |
| Leggmason Partners |
Oppenheimer Gold and Leggmason Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Gold and Leggmason Partners
The main advantage of trading using opposite Oppenheimer Gold and Leggmason Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Gold position performs unexpectedly, Leggmason Partners 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 Leggmason Partners will offset losses from the drop in Leggmason Partners' long position.| Oppenheimer Gold vs. First Eagle Gold | Oppenheimer Gold vs. First Eagle Gold | Oppenheimer Gold vs. Oppenheimer Gold Spec | Oppenheimer Gold vs. Gold Portfolio Fidelity |
| Leggmason Partners vs. Oppenheimer Gold Special | Leggmason Partners vs. Precious Metals And | Leggmason Partners vs. Franklin Gold Precious | Leggmason Partners vs. Invesco Gold Special |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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