Correlation Between Oakmark Bond and Oakmark Fund
Can any of the company-specific risk be diversified away by investing in both Oakmark Bond 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 Bond 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 Bond and Oakmark Fund R6, you can compare the effects of market volatilities on Oakmark Bond 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 Bond with a short position of Oakmark Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Bond and Oakmark Fund.
Diversification Opportunities for Oakmark Bond and Oakmark Fund
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oakmark and Oakmark is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Bond and Oakmark Fund R6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Fund R6 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 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 R6 has no effect on the direction of Oakmark Bond i.e., Oakmark Bond and Oakmark Fund go up and down completely randomly.
Pair Corralation between Oakmark Bond and Oakmark Fund
Assuming the 90 days horizon Oakmark Bond is expected to generate 4.29 times less return on investment than Oakmark Fund. But when comparing it to its historical volatility, Oakmark Bond is 2.53 times less risky than Oakmark Fund. It trades about 0.05 of its potential returns per unit of risk. Oakmark Fund R6 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11,454 in Oakmark Fund R6 on September 1, 2024 and sell it today you would earn a total of 4,856 from holding Oakmark Fund R6 or generate 42.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Bond vs. Oakmark Fund R6
Performance |
| Timeline |
| Oakmark Bond |
| Oakmark Fund R6 |
Oakmark Bond and Oakmark Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Bond and Oakmark Fund
The main advantage of trading using opposite Oakmark Bond and Oakmark Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Bond 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 Bond vs. Oakmark International Fund | Oakmark Bond vs. Oakmark Fund Advisor | Oakmark Bond vs. Oakmark Select Fund | Oakmark Bond vs. Oakmark Global Select |
| Oakmark Fund vs. Oakmark International Fund | Oakmark Fund vs. Oakmark Fund Advisor | Oakmark Fund vs. Oakmark Select Fund | Oakmark Fund vs. Oakmark Global Select |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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