Correlation Between Vanguard Windsor and Oppenheimer Gold

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

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

Diversification Opportunities for Vanguard Windsor and Oppenheimer Gold

0.18

Correlation Coefficient

Vanguard Windsor  Oppenheimer Gold

Average diversification

The 3 months correlation between VANGUARD and Oppenheimer is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Windsor Fund and Oppenheimer Gold Spec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Gold Spec and Vanguard Windsor 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 Vanguard Windsor Fund 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 Spec has no effect on the direction of Vanguard Windsor i.e., Vanguard Windsor and Oppenheimer Gold go up and down completely randomly.

Pair Corralation between Vanguard Windsor and Oppenheimer Gold

Assuming the 90 days horizon Vanguard Windsor is expected to generate 1.16 times less return on investment than Oppenheimer Gold. But when comparing it to its historical volatility, Vanguard Windsor Fund is 2.46 times less risky than Oppenheimer Gold. It trades about 0.16 of its potential returns per unit of risk. Oppenheimer Gold Spec is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,637  in Oppenheimer Gold Spec on September 3, 2024 and sell it today you would earn a total of  205.00  from holding Oppenheimer Gold Spec or generate 7.77% return on investment over 90 days.

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

Vanguard Windsor Fund  vs.  Oppenheimer Gold Spec

Vanguard Windsor

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Windsor Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Vanguard Windsor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Oppenheimer Gold Spec

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer Gold Spec are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Oppenheimer Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Vanguard Windsor and Oppenheimer Gold

The main advantage of trading using opposite Vanguard Windsor and Oppenheimer Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Windsor 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.

The idea behind Vanguard Windsor Fund and Oppenheimer Gold Spec 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.