Correlation Between Oakmark International and Selected American
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Selected American 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 Selected American 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 Selected American Shares, you can compare the effects of market volatilities on Oakmark International and Selected American 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 Selected American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Selected American.
Diversification Opportunities for Oakmark International and Selected American
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oakmark and Selected is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Fund and Selected American Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selected American Shares 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 Selected American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selected American Shares has no effect on the direction of Oakmark International i.e., Oakmark International and Selected American go up and down completely randomly.
Pair Corralation between Oakmark International and Selected American
Assuming the 90 days horizon Oakmark International Fund is expected to under-perform the Selected American. In addition to that, Oakmark International is 1.04 times more volatile than Selected American Shares. It trades about -0.24 of its total potential returns per unit of risk. Selected American Shares is currently generating about 0.16 per unit of volatility. If you would invest 4,285 in Selected American Shares on August 29, 2024 and sell it today you would earn a total of 162.00 from holding Selected American Shares or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark International Fund vs. Selected American Shares
Performance |
| Timeline |
| Oakmark International |
| Selected American Shares |
Oakmark International and Selected American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Selected American
The main advantage of trading using opposite Oakmark International and Selected American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Selected American 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 Selected American will offset losses from the drop in Selected American'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 |
| Selected American vs. Marsico Focus Fund | Selected American vs. Artisan International Fund | Selected American vs. Third Avenue Value | Selected American vs. Oakmark Select 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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