Correlation Between Oakmark International and Gqg Partners
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Gqg Partners 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 Gqg Partners 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 Gqg Partners International, you can compare the effects of market volatilities on Oakmark International and Gqg Partners 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 Gqg Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Gqg Partners.
Diversification Opportunities for Oakmark International and Gqg Partners
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oakmark and Gqg is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Fund and Gqg Partners International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gqg Partners Interna 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 Gqg Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gqg Partners Interna has no effect on the direction of Oakmark International i.e., Oakmark International and Gqg Partners go up and down completely randomly.
Pair Corralation between Oakmark International and Gqg Partners
Assuming the 90 days horizon Oakmark International is expected to generate 1.18 times less return on investment than Gqg Partners. In addition to that, Oakmark International is 1.97 times more volatile than Gqg Partners International. It trades about 0.09 of its total potential returns per unit of risk. Gqg Partners International is currently generating about 0.2 per unit of volatility. If you would invest 1,028 in Gqg Partners International on December 1, 2024 and sell it today you would earn a total of 25.00 from holding Gqg Partners International or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Oakmark International Fund vs. Gqg Partners International
Performance |
| Timeline |
| Oakmark International |
| Gqg Partners Interna |
Oakmark International and Gqg Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Gqg Partners
The main advantage of trading using opposite Oakmark International and Gqg Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Gqg Partners 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 Gqg Partners will offset losses from the drop in Gqg Partners' long position.The idea behind Oakmark International Fund and Gqg Partners International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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