Correlation Between Fulcrum Diversified and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Fulcrum Diversified 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 Fulcrum Diversified and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulcrum Diversified Absolute and Oakmark International Fund, you can compare the effects of market volatilities on Fulcrum Diversified 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 Fulcrum Diversified with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulcrum Diversified and Oakmark International.
Diversification Opportunities for Fulcrum Diversified and Oakmark International
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fulcrum and Oakmark is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Diversified Absolute and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Fulcrum Diversified 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 Fulcrum Diversified Absolute 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 Fulcrum Diversified i.e., Fulcrum Diversified and Oakmark International go up and down completely randomly.
Pair Corralation between Fulcrum Diversified and Oakmark International
Assuming the 90 days horizon Fulcrum Diversified Absolute is expected to generate 0.37 times more return on investment than Oakmark International. However, Fulcrum Diversified Absolute is 2.67 times less risky than Oakmark International. It trades about 0.04 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 870.00 in Fulcrum Diversified Absolute on October 11, 2024 and sell it today you would earn a total of 63.00 from holding Fulcrum Diversified Absolute or generate 7.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Fulcrum Diversified Absolute vs. Oakmark International Fund
Performance |
Timeline |
Fulcrum Diversified |
Oakmark International |
Fulcrum Diversified and Oakmark International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fulcrum Diversified and Oakmark International
The main advantage of trading using opposite Fulcrum Diversified and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Diversified 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.Fulcrum Diversified vs. Federated Hermes Conservative | Fulcrum Diversified vs. Stone Ridge Diversified | Fulcrum Diversified vs. Madison Diversified Income | Fulcrum Diversified vs. Pimco Diversified Income |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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