Correlation Between Oakmark Fund and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Oakmark Fund and Oakmark 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 Fund and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Fund Investor and Oakmark International Small, you can compare the effects of market volatilities on Oakmark Fund and Oakmark 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 Fund with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Fund and Oakmark International.
Diversification Opportunities for Oakmark Fund and Oakmark International
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oakmark and Oakmark is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Fund Investor and Oakmark International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Oakmark Fund 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 Fund Investor are associated (or correlated) with Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Oakmark Fund i.e., Oakmark Fund and Oakmark International go up and down completely randomly.
Pair Corralation between Oakmark Fund and Oakmark International
Assuming the 90 days horizon Oakmark Fund Investor is expected to generate 0.98 times more return on investment than Oakmark International. However, Oakmark Fund Investor is 1.02 times less risky than Oakmark International. It trades about 0.13 of its potential returns per unit of risk. Oakmark International Small is currently generating about -0.04 per unit of risk. If you would invest 14,097 in Oakmark Fund Investor on August 29, 2024 and sell it today you would earn a total of 2,128 from holding Oakmark Fund Investor or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Fund Investor vs. Oakmark International Small
Performance |
| Timeline |
| Oakmark Fund Investor |
| Oakmark International |
Oakmark Fund and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Fund and Oakmark International
The main advantage of trading using opposite Oakmark Fund and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Fund position performs unexpectedly, Oakmark 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 Oakmark International will offset losses from the drop in Oakmark International's long position.| Oakmark Fund vs. Oakmark Select Fund | Oakmark Fund vs. Oakmark International Fund | Oakmark Fund vs. Oakmark Equity And | Oakmark Fund vs. Oakmark Global Fund |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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