Correlation Between Avantis Large and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Avantis Large and Oakmark International 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 Avantis Large and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avantis Large Cap and Oakmark International Fund, you can compare the effects of market volatilities on Avantis Large and Oakmark International 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 Avantis Large with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avantis Large and Oakmark International.
Diversification Opportunities for Avantis Large and Oakmark International
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Avantis and Oakmark is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Avantis Large Cap and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Avantis Large 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 Avantis Large Cap are associated (or correlated) with Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Avantis Large i.e., Avantis Large and Oakmark International go up and down completely randomly.
Pair Corralation between Avantis Large and Oakmark International
Assuming the 90 days horizon Avantis Large Cap is expected to under-perform the Oakmark International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Avantis Large Cap is 1.02 times less risky than Oakmark International. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Oakmark International Fund is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,530 in Oakmark International Fund on September 13, 2024 and sell it today you would earn a total of 126.00 from holding Oakmark International Fund or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avantis Large Cap vs. Oakmark International Fund
Performance |
| Timeline |
| Avantis Large Cap |
| Oakmark International |
Avantis Large and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avantis Large and Oakmark International
The main advantage of trading using opposite Avantis Large and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avantis Large position performs unexpectedly, Oakmark International 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 International will offset losses from the drop in Oakmark International's long position.| Avantis Large vs. Financials Ultrasector Profund | Avantis Large vs. Transamerica Financial Life | Avantis Large vs. Vanguard Financials Index | Avantis Large vs. Mesirow Financial Small |
| Oakmark International vs. Fidelity Capital Income | Oakmark International vs. Pax High Yield | Oakmark International vs. Guggenheim High Yield | Oakmark International vs. T Rowe Price |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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