Correlation Between Dow Jones and Oakmark Select
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Oakmark Select 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 Dow Jones and Oakmark Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Oakmark Select Fund, you can compare the effects of market volatilities on Dow Jones and Oakmark Select 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 Dow Jones with a short position of Oakmark Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Oakmark Select.
Diversification Opportunities for Dow Jones and Oakmark Select
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Oakmark is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Oakmark Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Select and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Oakmark Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Select has no effect on the direction of Dow Jones i.e., Dow Jones and Oakmark Select go up and down completely randomly.
Pair Corralation between Dow Jones and Oakmark Select
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.87 times less return on investment than Oakmark Select. But when comparing it to its historical volatility, Dow Jones Industrial is 1.26 times less risky than Oakmark Select. It trades about 0.21 of its potential returns per unit of risk. Oakmark Select Fund is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 7,647 in Oakmark Select Fund on August 25, 2024 and sell it today you would earn a total of 665.00 from holding Oakmark Select Fund or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Oakmark Select Fund
Performance |
| Timeline |
Dow Jones and Oakmark Select Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Oakmark Select Fund
Pair trading matchups for Oakmark Select
Pair Trading with Dow Jones and Oakmark Select
The main advantage of trading using opposite Dow Jones and Oakmark Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Oakmark Select 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 Select will offset losses from the drop in Oakmark Select's long position.| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
| Oakmark Select vs. Quantitative Longshort Equity | Oakmark Select vs. Aqr Long Short Equity | Oakmark Select vs. Ultra Short Fixed Income | Oakmark Select vs. Angel Oak Ultrashort |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |