Correlation Between Invesco Municipal and Oppenheimer Gold
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal 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 Invesco Municipal and Oppenheimer Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Income and Oppenheimer Gold Special, you can compare the effects of market volatilities on Invesco Municipal 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 Invesco Municipal with a short position of Oppenheimer Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and Oppenheimer Gold.
Diversification Opportunities for Invesco Municipal and Oppenheimer Gold
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and Oppenheimer is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income 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 Invesco Municipal 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 Invesco Municipal Income 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 Invesco Municipal i.e., Invesco Municipal and Oppenheimer Gold go up and down completely randomly.
Pair Corralation between Invesco Municipal and Oppenheimer Gold
Assuming the 90 days horizon Invesco Municipal Income is expected to under-perform the Oppenheimer Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, Invesco Municipal Income is 5.01 times less risky than Oppenheimer Gold. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Oppenheimer Gold Special is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,328 in Oppenheimer Gold Special on November 6, 2024 and sell it today you would earn a total of 212.00 from holding Oppenheimer Gold Special or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Invesco Municipal Income vs. Oppenheimer Gold Special
Performance |
| Timeline |
| Invesco Municipal Income |
| Oppenheimer Gold Special |
Invesco Municipal and Oppenheimer Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and Oppenheimer Gold
The main advantage of trading using opposite Invesco Municipal and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal 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.| Invesco Municipal vs. Vanguard Health Care | Invesco Municipal vs. Highland Longshort Healthcare | Invesco Municipal vs. Alger Health Sciences | Invesco Municipal vs. Eventide Healthcare Life |
| Oppenheimer Gold vs. Old Westbury California | Oppenheimer Gold vs. Lind Capital Partners | Oppenheimer Gold vs. California Municipal Portfolio | Oppenheimer Gold vs. Franklin Adjustable Government |
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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