Correlation Between Oakmark Bond and Oakmark Global
Can any of the company-specific risk be diversified away by investing in both Oakmark Bond and Oakmark 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 Bond and Oakmark Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Bond and Oakmark Global, you can compare the effects of market volatilities on Oakmark Bond and Oakmark 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 Bond with a short position of Oakmark Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Bond and Oakmark Global.
Diversification Opportunities for Oakmark Bond and Oakmark Global
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oakmark and Oakmark is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Bond and Oakmark Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Global and Oakmark Bond 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 Bond are associated (or correlated) with Oakmark Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Global has no effect on the direction of Oakmark Bond i.e., Oakmark Bond and Oakmark Global go up and down completely randomly.
Pair Corralation between Oakmark Bond and Oakmark Global
Assuming the 90 days horizon Oakmark Bond is expected to generate 0.38 times more return on investment than Oakmark Global. However, Oakmark Bond is 2.63 times less risky than Oakmark Global. It trades about 0.11 of its potential returns per unit of risk. Oakmark Global is currently generating about -0.05 per unit of risk. If you would invest 891.00 in Oakmark Bond on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Oakmark Bond or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oakmark Bond vs. Oakmark Global
Performance |
| Timeline |
| Oakmark Bond |
| Oakmark Global |
Oakmark Bond and Oakmark Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Bond and Oakmark Global
The main advantage of trading using opposite Oakmark Bond and Oakmark Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Bond position performs unexpectedly, Oakmark 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 Oakmark Global will offset losses from the drop in Oakmark Global's long position.| Oakmark Bond vs. Goldman Sachs Clean | Oakmark Bond vs. Short Precious Metals | Oakmark Bond vs. Vy Goldman Sachs | Oakmark Bond vs. Gabelli Gold Fund |
| Oakmark Global vs. Metropolitan West High | Oakmark Global vs. Intal High Relative | Oakmark Global vs. Ab Global Risk | Oakmark Global vs. Needham Aggressive 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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