Correlation Between Oakmark International and Henderson Global
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Henderson Global 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 Henderson Global 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 Henderson Global Equity, you can compare the effects of market volatilities on Oakmark International and Henderson Global 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 Henderson Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Henderson Global.
Diversification Opportunities for Oakmark International and Henderson Global
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oakmark and Henderson is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Fund and Henderson Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Global Equity 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 Henderson Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Global Equity has no effect on the direction of Oakmark International i.e., Oakmark International and Henderson Global go up and down completely randomly.
Pair Corralation between Oakmark International and Henderson Global
Assuming the 90 days horizon Oakmark International Fund is expected to under-perform the Henderson Global. In addition to that, Oakmark International is 2.21 times more volatile than Henderson Global Equity. It trades about -0.1 of its total potential returns per unit of risk. Henderson Global Equity is currently generating about 0.04 per unit of volatility. If you would invest 624.00 in Henderson Global Equity on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Henderson Global Equity or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Oakmark International Fund vs. Henderson Global Equity
Performance |
| Timeline |
| Oakmark International |
| Henderson Global Equity |
Oakmark International and Henderson Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Henderson Global
The main advantage of trading using opposite Oakmark International and Henderson Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Henderson Global 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 Henderson Global will offset losses from the drop in Henderson Global's long position.| Oakmark International vs. Oakmark International Fund | Oakmark International vs. Oakmark Fund Advisor | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark Global Select |
| Henderson Global vs. Baron Emerging Markets | Henderson Global vs. Df Dent Midcap | Henderson Global vs. The Brown Capital | Henderson Global vs. Fidelity International Growth |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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