Correlation Between Global Gold and Oakmark Global
Can any of the company-specific risk be diversified away by investing in both Global Gold and Oakmark Global 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 Global Gold and Oakmark Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Oakmark Global Select, you can compare the effects of market volatilities on Global Gold and Oakmark Global 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 Global Gold with a short position of Oakmark Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Oakmark Global.
Diversification Opportunities for Global Gold and Oakmark Global
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Oakmark is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Oakmark Global Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Global Select and Global 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 Global Gold Fund are associated (or correlated) with Oakmark Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Global Select has no effect on the direction of Global Gold i.e., Global Gold and Oakmark Global go up and down completely randomly.
Pair Corralation between Global Gold and Oakmark Global
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.16 times more return on investment than Oakmark Global. However, Global Gold is 2.16 times more volatile than Oakmark Global Select. It trades about 0.04 of its potential returns per unit of risk. Oakmark Global Select is currently generating about 0.07 per unit of risk. If you would invest 960.00 in Global Gold Fund on August 30, 2024 and sell it today you would earn a total of 314.00 from holding Global Gold Fund or generate 32.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Oakmark Global Select
Performance |
| Timeline |
| Global Gold Fund |
| Oakmark Global Select |
Global Gold and Oakmark Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Oakmark Global
The main advantage of trading using opposite Global Gold and Oakmark Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Oakmark Global 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 Oakmark Global will offset losses from the drop in Oakmark Global's long position.| Global Gold vs. First Eagle Gold | Global Gold vs. Aquagold International | Global Gold vs. Morningstar Unconstrained Allocation | Global Gold vs. Thrivent High Yield |
| Oakmark Global vs. Dunham Real Estate | Oakmark Global vs. Forum Real Estate | Oakmark Global vs. Heitman Real Estate | Oakmark Global vs. Virtus Real Estate |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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