Correlation Between NYSE Composite and Oakmark Select
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Oakmark Select 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 Select Fund, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Oakmark Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Oakmark Select.
Diversification Opportunities for NYSE Composite and Oakmark Select
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Oakmark is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Oakmark Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Select 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 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 NYSE Composite i.e., NYSE Composite and Oakmark Select go up and down completely randomly.
Pair Corralation between NYSE Composite and Oakmark Select
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.59 times less return on investment than Oakmark Select. But when comparing it to its historical volatility, NYSE Composite is 1.99 times less risky than Oakmark Select. It trades about 0.42 of its potential returns per unit of risk. Oakmark Select Fund is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 7,763 in Oakmark Select Fund on September 1, 2024 and sell it today you would earn a total of 699.00 from holding Oakmark Select Fund or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NYSE Composite vs. Oakmark Select Fund
Performance |
| Timeline |
NYSE Composite and Oakmark Select Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Oakmark Select Fund
Pair trading matchups for Oakmark Select
Pair Trading with NYSE Composite and Oakmark Select
The main advantage of trading using opposite NYSE Composite and Oakmark Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Oakmark Select vs. Oakmark Fund Investor | Oakmark Select vs. Oakmark International Fund | Oakmark Select vs. Oakmark Global Fund | Oakmark Select vs. Oakmark Equity And |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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