Correlation Between Oakmark International and Ab International
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Ab International 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 Ab International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark International Fund and Ab International Value, you can compare the effects of market volatilities on Oakmark International and Ab International 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 Ab International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Ab International.
Diversification Opportunities for Oakmark International and Ab International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oakmark and ABIAX is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Fund and Ab International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab International Value 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 Fund are associated (or correlated) with Ab International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab International Value has no effect on the direction of Oakmark International i.e., Oakmark International and Ab International go up and down completely randomly.
Pair Corralation between Oakmark International and Ab International
Assuming the 90 days horizon Oakmark International Fund is expected to generate 0.64 times more return on investment than Ab International. However, Oakmark International Fund is 1.56 times less risky than Ab International. It trades about -0.1 of its potential returns per unit of risk. Ab International Value is currently generating about -0.16 per unit of risk. If you would invest 2,655 in Oakmark International Fund on September 4, 2024 and sell it today you would lose (69.00) from holding Oakmark International Fund or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark International Fund vs. Ab International Value
Performance |
| Timeline |
| Oakmark International |
| Ab International Value |
Oakmark International and Ab International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Ab International
The main advantage of trading using opposite Oakmark International and Ab International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Ab International 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 Ab International will offset losses from the drop in Ab International's long position.| Oakmark International vs. Oakmark Fund Investor | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark International Small | Oakmark International vs. Oakmark Global Fund |
| Ab International vs. Ab Global E | Ab International vs. Ab Global E | Ab International vs. Ab Global E | Ab International vs. Ab Minnesota 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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