Correlation Between Oakmark Select and Longleaf Partners
Can any of the company-specific risk be diversified away by investing in both Oakmark Select and Longleaf Partners 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 Select and Longleaf Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Select Fund and Longleaf Partners Fund, you can compare the effects of market volatilities on Oakmark Select and Longleaf Partners 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 Select with a short position of Longleaf Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Select and Longleaf Partners.
Diversification Opportunities for Oakmark Select and Longleaf Partners
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oakmark and Longleaf is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Select Fund and Longleaf Partners Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Longleaf Partners and Oakmark Select 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 Select Fund are associated (or correlated) with Longleaf Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Longleaf Partners has no effect on the direction of Oakmark Select i.e., Oakmark Select and Longleaf Partners go up and down completely randomly.
Pair Corralation between Oakmark Select and Longleaf Partners
Assuming the 90 days horizon Oakmark Select Fund is expected to generate 1.2 times more return on investment than Longleaf Partners. However, Oakmark Select is 1.2 times more volatile than Longleaf Partners Fund. It trades about 0.11 of its potential returns per unit of risk. Longleaf Partners Fund is currently generating about 0.09 per unit of risk. If you would invest 7,080 in Oakmark Select Fund on September 1, 2024 and sell it today you would earn a total of 1,382 from holding Oakmark Select Fund or generate 19.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Select Fund vs. Longleaf Partners Fund
Performance |
| Timeline |
| Oakmark Select |
| Longleaf Partners |
Oakmark Select and Longleaf Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Select and Longleaf Partners
The main advantage of trading using opposite Oakmark Select and Longleaf Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Select position performs unexpectedly, Longleaf Partners 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 Longleaf Partners will offset losses from the drop in Longleaf Partners' long position.| Oakmark Select vs. Oakmark Fund Investor | Oakmark Select vs. Oakmark International Fund | Oakmark Select vs. Oakmark Global Fund | Oakmark Select vs. Oakmark Equity And |
| Longleaf Partners vs. T Rowe Price | Longleaf Partners vs. Tax Managed Mid Small | Longleaf Partners vs. Principal Lifetime Hybrid | Longleaf Partners vs. Western Asset Diversified |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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