Correlation Between Oakmark Global and Oakmark Fund
Can any of the company-specific risk be diversified away by investing in both Oakmark Global and Oakmark Fund 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 Oakmark Fund 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 Oakmark Fund Investor, you can compare the effects of market volatilities on Oakmark Global and Oakmark Fund 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 Oakmark Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Global and Oakmark Fund.
Diversification Opportunities for Oakmark Global and Oakmark Fund
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oakmark and OAKMARK is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Global Fund and Oakmark Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Fund Investor 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 Oakmark Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Fund Investor has no effect on the direction of Oakmark Global i.e., Oakmark Global and Oakmark Fund go up and down completely randomly.
Pair Corralation between Oakmark Global and Oakmark Fund
Assuming the 90 days horizon Oakmark Global Fund is expected to generate 1.1 times more return on investment than Oakmark Fund. However, Oakmark Global is 1.1 times more volatile than Oakmark Fund Investor. It trades about 0.25 of its potential returns per unit of risk. Oakmark Fund Investor is currently generating about 0.25 per unit of risk. If you would invest 3,280 in Oakmark Global Fund on November 8, 2024 and sell it today you would earn a total of 152.00 from holding Oakmark Global Fund or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oakmark Global Fund vs. Oakmark Fund Investor
Performance |
| Timeline |
| Oakmark Global |
| Oakmark Fund Investor |
Oakmark Global and Oakmark Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Global and Oakmark Fund
The main advantage of trading using opposite Oakmark Global and Oakmark Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Global position performs unexpectedly, Oakmark Fund 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 Fund will offset losses from the drop in Oakmark Fund'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 |
| Oakmark Fund vs. Oakmark Select Fund | Oakmark Fund vs. Oakmark International Fund | Oakmark Fund vs. Oakmark Equity And | Oakmark Fund 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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