Correlation Between Oakmark Equity and Oakmark Fund
Can any of the company-specific risk be diversified away by investing in both Oakmark Equity and Oakmark Fund 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 Equity and Oakmark Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Equity And and Oakmark Fund Advisor, you can compare the effects of market volatilities on Oakmark Equity and Oakmark Fund 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 Equity with a short position of Oakmark Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Equity and Oakmark Fund.
Diversification Opportunities for Oakmark Equity and Oakmark Fund
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oakmark and Oakmark is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Equity And and Oakmark Fund Advisor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Fund Advisor and Oakmark Equity 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 Equity And are associated (or correlated) with Oakmark Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Fund Advisor has no effect on the direction of Oakmark Equity i.e., Oakmark Equity and Oakmark Fund go up and down completely randomly.
Pair Corralation between Oakmark Equity and Oakmark Fund
Assuming the 90 days horizon Oakmark Equity is expected to generate 1.96 times less return on investment than Oakmark Fund. But when comparing it to its historical volatility, Oakmark Equity And is 1.82 times less risky than Oakmark Fund. It trades about 0.2 of its potential returns per unit of risk. Oakmark Fund Advisor is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 15,237 in Oakmark Fund Advisor on August 26, 2024 and sell it today you would earn a total of 779.00 from holding Oakmark Fund Advisor or generate 5.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Equity And vs. Oakmark Fund Advisor
Performance |
| Timeline |
| Oakmark Equity And |
| Oakmark Fund Advisor |
Oakmark Equity and Oakmark Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Equity and Oakmark Fund
The main advantage of trading using opposite Oakmark Equity and Oakmark Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Equity position performs unexpectedly, Oakmark Fund 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 Fund will offset losses from the drop in Oakmark Fund's long position.| Oakmark Equity vs. William Blair Large | Oakmark Equity vs. Enhanced Large Pany | Oakmark Equity vs. Federated Mdt Large | Oakmark Equity vs. Aqr Large Cap |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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