Correlation Between Oakmark Global and Oakmark Select
Can any of the company-specific risk be diversified away by investing in both Oakmark Global 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 Oakmark Global and Oakmark Select 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 Select Fund, you can compare the effects of market volatilities on Oakmark Global 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 Oakmark Global with a short position of Oakmark Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Global and Oakmark Select.
Diversification Opportunities for Oakmark Global and Oakmark Select
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oakmark and Oakmark is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Global Fund and Oakmark Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Select 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 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 Oakmark Global i.e., Oakmark Global and Oakmark Select go up and down completely randomly.
Pair Corralation between Oakmark Global and Oakmark Select
Assuming the 90 days horizon Oakmark Global is expected to generate 4.35 times less return on investment than Oakmark Select. But when comparing it to its historical volatility, Oakmark Global Fund is 1.12 times less risky than Oakmark Select. It trades about 0.02 of its potential returns per unit of risk. Oakmark Select Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,551 in Oakmark Select Fund on September 19, 2024 and sell it today you would earn a total of 2,755 from holding Oakmark Select Fund or generate 49.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Global Fund vs. Oakmark Select Fund
Performance |
| Timeline |
| Oakmark Global |
| Oakmark Select |
Oakmark Global and Oakmark Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Global and Oakmark Select
The main advantage of trading using opposite Oakmark Global and Oakmark Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Global 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.| 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 Select vs. Oakmark International Fund | Oakmark Select vs. Oakmark Equity And | Oakmark Select vs. Oakmark Global Fund | Oakmark Select vs. Clipper Fund Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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