Correlation Between Oakmark International and Oakmark Select
Can any of the company-specific risk be diversified away by investing in both Oakmark International 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 International 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 International Fund and Oakmark Select Fund, you can compare the effects of market volatilities on Oakmark International 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 International with a short position of Oakmark Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Oakmark Select.
Diversification Opportunities for Oakmark International and Oakmark Select
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oakmark and Oakmark is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International 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 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 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 International i.e., Oakmark International and Oakmark Select go up and down completely randomly.
Pair Corralation between Oakmark International and Oakmark Select
Assuming the 90 days horizon Oakmark International Fund is expected to under-perform the Oakmark Select. In addition to that, Oakmark International is 1.77 times more volatile than Oakmark Select Fund. It trades about -0.13 of its total potential returns per unit of risk. Oakmark Select Fund is currently generating about 0.13 per unit of volatility. If you would invest 8,174 in Oakmark Select Fund on September 19, 2024 and sell it today you would earn a total of 132.00 from holding Oakmark Select Fund or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oakmark International Fund vs. Oakmark Select Fund
Performance |
| Timeline |
| Oakmark International |
| Oakmark Select |
Oakmark International and Oakmark Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Oakmark Select
The main advantage of trading using opposite Oakmark International and Oakmark Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International 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 International vs. Oakmark Fund Advisor | Oakmark International vs. Oakmark Global Select | Oakmark International vs. Oakmark Bond | Oakmark International vs. Oakmark Equity And |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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