Correlation Between Oppenheimer Gold and Third Avenue
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Gold and Third Avenue 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 Third Avenue 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 Third Avenue Value, you can compare the effects of market volatilities on Oppenheimer Gold and Third Avenue 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 Third Avenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Gold and Third Avenue.
Diversification Opportunities for Oppenheimer Gold and Third Avenue
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Oppenheimer and Third is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Gold Special and Third Avenue Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Third Avenue Value 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 Third Avenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Third Avenue Value has no effect on the direction of Oppenheimer Gold i.e., Oppenheimer Gold and Third Avenue go up and down completely randomly.
Pair Corralation between Oppenheimer Gold and Third Avenue
Assuming the 90 days horizon Oppenheimer Gold Special is expected to generate 1.71 times more return on investment than Third Avenue. However, Oppenheimer Gold is 1.71 times more volatile than Third Avenue Value. It trades about 0.04 of its potential returns per unit of risk. Third Avenue Value is currently generating about 0.04 per unit of risk. If you would invest 1,957 in Oppenheimer Gold Special on August 30, 2024 and sell it today you would earn a total of 541.00 from holding Oppenheimer Gold Special or generate 27.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oppenheimer Gold Special vs. Third Avenue Value
Performance |
| Timeline |
| Oppenheimer Gold Special |
| Third Avenue Value |
Oppenheimer Gold and Third Avenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oppenheimer Gold and Third Avenue
The main advantage of trading using opposite Oppenheimer Gold and Third Avenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Gold position performs unexpectedly, Third Avenue 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 Third Avenue will offset losses from the drop in Third Avenue's long position.| Oppenheimer Gold vs. First Eagle Gold | Oppenheimer Gold vs. Aquagold International | Oppenheimer Gold vs. Morningstar Unconstrained Allocation | Oppenheimer Gold vs. Thrivent High Yield |
| Third Avenue vs. Pace Smallmedium Value | Third Avenue vs. Hennessy Nerstone Mid | Third Avenue vs. American Century Etf | Third Avenue vs. Lord Abbett Small |
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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