Correlation Between Oakmark Global and Kopernik Global
Can any of the company-specific risk be diversified away by investing in both Oakmark Global and Kopernik Global 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 Global and Kopernik Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Global Fund and Kopernik Global All Cap, you can compare the effects of market volatilities on Oakmark Global and Kopernik Global 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 Global with a short position of Kopernik Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Global and Kopernik Global.
Diversification Opportunities for Oakmark Global and Kopernik Global
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oakmark and Kopernik is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Global Fund and Kopernik Global All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik Global All and Oakmark Global 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 Global Fund are associated (or correlated) with Kopernik Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik Global All has no effect on the direction of Oakmark Global i.e., Oakmark Global and Kopernik Global go up and down completely randomly.
Pair Corralation between Oakmark Global and Kopernik Global
Assuming the 90 days horizon Oakmark Global Fund is expected to generate 1.1 times more return on investment than Kopernik Global. However, Oakmark Global is 1.1 times more volatile than Kopernik Global All Cap. It trades about 0.07 of its potential returns per unit of risk. Kopernik Global All Cap is currently generating about 0.04 per unit of risk. If you would invest 3,305 in Oakmark Global Fund on September 12, 2024 and sell it today you would earn a total of 111.00 from holding Oakmark Global Fund or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Global Fund vs. Kopernik Global All Cap
Performance |
| Timeline |
| Oakmark Global |
| Kopernik Global All |
Oakmark Global and Kopernik Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Global and Kopernik Global
The main advantage of trading using opposite Oakmark Global and Kopernik Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Global position performs unexpectedly, Kopernik Global 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 Kopernik Global will offset losses from the drop in Kopernik Global's long position.| Oakmark Global vs. Oakmark Equity And | Oakmark Global vs. Oakmark International Small | Oakmark Global vs. Oakmark Select Fund | Oakmark Global vs. Oakmark International Fund |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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