Correlation Between Oakmark International and Acadian Emerging
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Acadian Emerging 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 International and Acadian Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark International Small and Acadian Emerging Markets, you can compare the effects of market volatilities on Oakmark International and Acadian Emerging 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 International with a short position of Acadian Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Acadian Emerging.
Diversification Opportunities for Oakmark International and Acadian Emerging
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Oakmark and Acadian is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Small and Acadian Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Emerging Markets and Oakmark International 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 International Small are associated (or correlated) with Acadian Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Emerging Markets has no effect on the direction of Oakmark International i.e., Oakmark International and Acadian Emerging go up and down completely randomly.
Pair Corralation between Oakmark International and Acadian Emerging
Assuming the 90 days horizon Oakmark International Small is expected to under-perform the Acadian Emerging. In addition to that, Oakmark International is 1.21 times more volatile than Acadian Emerging Markets. It trades about -0.23 of its total potential returns per unit of risk. Acadian Emerging Markets is currently generating about -0.15 per unit of volatility. If you would invest 2,404 in Acadian Emerging Markets on August 30, 2024 and sell it today you would lose (57.00) from holding Acadian Emerging Markets or give up 2.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark International Small vs. Acadian Emerging Markets
Performance |
| Timeline |
| Oakmark International |
| Acadian Emerging Markets |
Oakmark International and Acadian Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Acadian Emerging
The main advantage of trading using opposite Oakmark International and Acadian Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Acadian Emerging 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 Acadian Emerging will offset losses from the drop in Acadian Emerging's long position.The idea behind Oakmark International Small and Acadian Emerging Markets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Acadian Emerging vs. Driehaus Emerging Markets | Acadian Emerging vs. Oakmark International Small | Acadian Emerging vs. T Rowe Price | Acadian Emerging vs. Emerging Markets Portfolio |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |