Correlation Between NYSE Composite and Oakmark International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Oakmark International Fund, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Oakmark International.
Diversification Opportunities for NYSE Composite and Oakmark International
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Oakmark is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Oakmark International go up and down completely randomly.
Pair Corralation between NYSE Composite and Oakmark International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.71 times more return on investment than Oakmark International. However, NYSE Composite is 1.4 times less risky than Oakmark International. It trades about 0.11 of its potential returns per unit of risk. Oakmark International Fund is currently generating about 0.0 per unit of risk. If you would invest 1,766,949 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 260,255 from holding NYSE Composite or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Oakmark International Fund
Performance |
| Timeline |
NYSE Composite and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Oakmark International Fund
Pair trading matchups for Oakmark International
Pair Trading with NYSE Composite and Oakmark International
The main advantage of trading using opposite NYSE Composite and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Oakmark International vs. Oakmark Fund Investor | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark International Small | Oakmark International vs. Oakmark Global Fund |
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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