Correlation Between Oakmark International and Cullen International
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Cullen 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 Cullen 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 Cullen International High, you can compare the effects of market volatilities on Oakmark International and Cullen 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 Cullen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Cullen International.
Diversification Opportunities for Oakmark International and Cullen International
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oakmark and Cullen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Fund and Cullen International High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen International High 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 Cullen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen International High has no effect on the direction of Oakmark International i.e., Oakmark International and Cullen International go up and down completely randomly.
Pair Corralation between Oakmark International and Cullen International
Assuming the 90 days horizon Oakmark International Fund is expected to under-perform the Cullen International. In addition to that, Oakmark International is 1.61 times more volatile than Cullen International High. It trades about -0.25 of its total potential returns per unit of risk. Cullen International High is currently generating about -0.13 per unit of volatility. If you would invest 1,110 in Cullen International High on August 26, 2024 and sell it today you would lose (22.00) from holding Cullen International High or give up 1.98% 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. Cullen International High
Performance |
| Timeline |
| Oakmark International |
| Cullen International High |
Oakmark International and Cullen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Cullen International
The main advantage of trading using opposite Oakmark International and Cullen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Cullen 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 Cullen International will offset losses from the drop in Cullen 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 |
| Cullen International vs. Cullen Small Cap | Cullen International vs. Cullen Small Cap | Cullen International vs. Cullen Value Fund | Cullen International vs. Cullen Value 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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