Correlation Between Oakmark International and American Beacon
Can any of the company-specific risk be diversified away by investing in both Oakmark International and American Beacon 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 American Beacon 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 American Beacon International, you can compare the effects of market volatilities on Oakmark International and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and American Beacon.
Diversification Opportunities for Oakmark International and American Beacon
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oakmark and American is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Fund and American Beacon International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Inte 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Inte has no effect on the direction of Oakmark International i.e., Oakmark International and American Beacon go up and down completely randomly.
Pair Corralation between Oakmark International and American Beacon
Assuming the 90 days horizon Oakmark International Fund is expected to under-perform the American Beacon. In addition to that, Oakmark International is 1.41 times more volatile than American Beacon International. It trades about -0.1 of its total potential returns per unit of risk. American Beacon International is currently generating about -0.06 per unit of volatility. If you would invest 1,919 in American Beacon International on September 1, 2024 and sell it today you would lose (23.00) from holding American Beacon International or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oakmark International Fund vs. American Beacon International
Performance |
| Timeline |
| Oakmark International |
| American Beacon Inte |
Oakmark International and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and American Beacon
The main advantage of trading using opposite Oakmark International and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Oakmark International vs. Msift High Yield | Oakmark International vs. Gmo High Yield | Oakmark International vs. Artisan High Income | Oakmark International vs. Alpine High Yield |
| American Beacon vs. American Beacon Large | American Beacon vs. Large Pany Value | American Beacon vs. American Beacon Balanced | American Beacon vs. American Beacon Small |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |