Correlation Between Oppenheimer International and Goldman Sachs

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

By analyzing existing cross correlation between Oppenheimer International Diversified and Goldman Sachs Clean, you can compare the effects of market volatilities on Oppenheimer International and Goldman Sachs 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 International with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oppenheimer International and Goldman Sachs.

Diversification Opportunities for Oppenheimer International and Goldman Sachs

0.22

Correlation Coefficient

Oppenheimer International  Goldman Sachs

Modest diversification

The 3 months correlation between Oppenheimer and Goldman is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Oppenheimer International Dive and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and Oppenheimer International 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 International Diversified are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Clean has no effect on the direction of Oppenheimer International i.e., Oppenheimer International and Goldman Sachs go up and down completely randomly.

Pair Corralation between Oppenheimer International and Goldman Sachs

Assuming the 90 days horizon Oppenheimer International is expected to generate 2.66 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Oppenheimer International Diversified is 1.5 times less risky than Goldman Sachs. It trades about 0.07 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  876.00  in Goldman Sachs Clean on February 11, 2024 and sell it today you would earn a total of  74.00  from holding Goldman Sachs Clean or generate 8.45% return on investment over 90 days.

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

Oppenheimer International Dive  vs.  Goldman Sachs Clean

Oppenheimer International

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oppenheimer International Diversified are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Oppenheimer International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs Clean

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Clean are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Oppenheimer International and Goldman Sachs

The main advantage of trading using opposite Oppenheimer International and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oppenheimer International position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.

The idea behind Oppenheimer International Diversified and Goldman Sachs Clean 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.