Correlation Between Brandes International and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Brandes International 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 Brandes International and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brandes International Equity and Oakmark International Fund, you can compare the effects of market volatilities on Brandes International 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 Brandes International with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brandes International and Oakmark International.
Diversification Opportunities for Brandes International and Oakmark International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brandes and Oakmark is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Brandes International Equity and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Brandes 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 Brandes International Equity 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 Brandes International i.e., Brandes International and Oakmark International go up and down completely randomly.
Pair Corralation between Brandes International and Oakmark International
Assuming the 90 days horizon Brandes International Equity is expected to generate 0.76 times more return on investment than Oakmark International. However, Brandes International Equity is 1.32 times less risky than Oakmark International. It trades about 0.08 of its potential returns per unit of risk. Oakmark International Fund is currently generating about 0.01 per unit of risk. If you would invest 1,752 in Brandes International Equity on September 12, 2024 and sell it today you would earn a total of 408.00 from holding Brandes International Equity or generate 23.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Brandes International Equity vs. Oakmark International Fund
Performance |
| Timeline |
| Brandes International |
| Oakmark International |
Brandes International and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brandes International and Oakmark International
The main advantage of trading using opposite Brandes International and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brandes International 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.| Brandes International vs. Brandes International Equity | Brandes International vs. Blackrock Sp 500 | Brandes International vs. Bbh Partner Fund | Brandes International vs. Brandes International Small |
| Oakmark International vs. Smallcap Growth Fund | Oakmark International vs. Tfa Alphagen Growth | Oakmark International vs. Small Pany Growth | Oakmark International vs. Franklin Growth Opportunities |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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