Correlation Between Lgm Risk and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Lgm Risk 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 Lgm Risk and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lgm Risk Managed and Oakmark International, you can compare the effects of market volatilities on Lgm Risk 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 Lgm Risk with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgm Risk and Oakmark International.
Diversification Opportunities for Lgm Risk and Oakmark International
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lgm and Oakmark is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Lgm Risk Managed and Oakmark International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Lgm Risk 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 Lgm Risk Managed 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 Lgm Risk i.e., Lgm Risk and Oakmark International go up and down completely randomly.
Pair Corralation between Lgm Risk and Oakmark International
Assuming the 90 days horizon Lgm Risk Managed is expected to generate 0.25 times more return on investment than Oakmark International. However, Lgm Risk Managed is 4.0 times less risky than Oakmark International. It trades about 0.37 of its potential returns per unit of risk. Oakmark International is currently generating about -0.07 per unit of risk. If you would invest 1,125 in Lgm Risk Managed on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Lgm Risk Managed or generate 2.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Lgm Risk Managed vs. Oakmark International
Performance |
| Timeline |
| Lgm Risk Managed |
| Oakmark International |
Lgm Risk and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgm Risk and Oakmark International
The main advantage of trading using opposite Lgm Risk and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgm Risk 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.| Lgm Risk vs. American Balanced Fund | Lgm Risk vs. Westwood Largecap Value | Lgm Risk vs. Brookfield Real Assets | Lgm Risk vs. Fidelity Balanced Fund |
| Oakmark International vs. Legg Mason Partners | Oakmark International vs. Western Asset High | Oakmark International vs. Lgm Risk Managed | Oakmark International vs. Franklin High Income |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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