Correlation Between Oppenheimer Gold and Aberdeen
Can any of the company-specific risk be diversified away by investing in both Oppenheimer Gold and Aberdeen 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 Aberdeen 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 Aberdeen Equity A, you can compare the effects of market volatilities on Oppenheimer Gold and Aberdeen 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 Aberdeen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer Gold and Aberdeen.
Diversification Opportunities for Oppenheimer Gold and Aberdeen
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Oppenheimer and Aberdeen is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer Gold Special and Aberdeen Equity A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Equity A 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 Aberdeen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Equity A has no effect on the direction of Oppenheimer Gold i.e., Oppenheimer Gold and Aberdeen go up and down completely randomly.
Pair Corralation between Oppenheimer Gold and Aberdeen
Assuming the 90 days horizon Oppenheimer Gold Special is expected to generate 2.45 times more return on investment than Aberdeen. However, Oppenheimer Gold is 2.45 times more volatile than Aberdeen Equity A. It trades about 0.08 of its potential returns per unit of risk. Aberdeen Equity A is currently generating about 0.17 per unit of risk. If you would invest 2,330 in Oppenheimer Gold Special on September 5, 2024 and sell it today you would earn a total of 196.00 from holding Oppenheimer Gold Special or generate 8.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Oppenheimer Gold Special vs. Aberdeen Equity A
Performance |
Timeline |
Oppenheimer Gold Special |
Aberdeen Equity A |
Oppenheimer Gold and Aberdeen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oppenheimer Gold and Aberdeen
The main advantage of trading using opposite Oppenheimer Gold and Aberdeen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer Gold position performs unexpectedly, Aberdeen 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 Aberdeen will offset losses from the drop in Aberdeen's long position.Oppenheimer Gold vs. First American Funds | Oppenheimer Gold vs. Prudential Government Money | Oppenheimer Gold vs. Rbc Funds Trust | Oppenheimer Gold vs. Hsbc Treasury Money |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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