Correlation Between Oakmark Equity and The Fairholme
Can any of the company-specific risk be diversified away by investing in both Oakmark Equity and The Fairholme 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 Oakmark Equity and The Fairholme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Equity And and The Fairholme Fund, you can compare the effects of market volatilities on Oakmark Equity and The Fairholme 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 Oakmark Equity with a short position of The Fairholme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Equity and The Fairholme.
Diversification Opportunities for Oakmark Equity and The Fairholme
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oakmark and The is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Equity And and The Fairholme Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Fairholme and Oakmark Equity 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 Oakmark Equity And are associated (or correlated) with The Fairholme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Fairholme has no effect on the direction of Oakmark Equity i.e., Oakmark Equity and The Fairholme go up and down completely randomly.
Pair Corralation between Oakmark Equity and The Fairholme
Assuming the 90 days horizon Oakmark Equity And is expected to generate 0.35 times more return on investment than The Fairholme. However, Oakmark Equity And is 2.82 times less risky than The Fairholme. It trades about 0.11 of its potential returns per unit of risk. The Fairholme Fund is currently generating about 0.03 per unit of risk. If you would invest 3,008 in Oakmark Equity And on August 31, 2024 and sell it today you would earn a total of 754.00 from holding Oakmark Equity And or generate 25.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Equity And vs. The Fairholme Fund
Performance |
| Timeline |
| Oakmark Equity And |
| The Fairholme |
Oakmark Equity and The Fairholme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Equity and The Fairholme
The main advantage of trading using opposite Oakmark Equity and The Fairholme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Equity position performs unexpectedly, The Fairholme 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 The Fairholme will offset losses from the drop in The Fairholme's long position.| Oakmark Equity vs. American Funds American | Oakmark Equity vs. American Funds American | Oakmark Equity vs. American Balanced | Oakmark Equity vs. American Balanced Fund |
| The Fairholme vs. Dodge Cox Stock | The Fairholme vs. American Mutual Fund | The Fairholme vs. American Funds American | The Fairholme vs. American Funds American |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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