Correlation Between Oakmark Select and American Funds
Can any of the company-specific risk be diversified away by investing in both Oakmark Select and American Funds 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 Select and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Select Fund and American Funds Inflation, you can compare the effects of market volatilities on Oakmark Select and American Funds 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 Select with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Select and American Funds.
Diversification Opportunities for Oakmark Select and American Funds
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oakmark and American is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Select Fund and American Funds Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Inflation and Oakmark Select 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 Select Fund are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Inflation has no effect on the direction of Oakmark Select i.e., Oakmark Select and American Funds go up and down completely randomly.
Pair Corralation between Oakmark Select and American Funds
Assuming the 90 days horizon Oakmark Select Fund is expected to generate 3.25 times more return on investment than American Funds. However, Oakmark Select is 3.25 times more volatile than American Funds Inflation. It trades about 0.26 of its potential returns per unit of risk. American Funds Inflation is currently generating about -0.04 per unit of risk. If you would invest 7,226 in Oakmark Select Fund on September 12, 2024 and sell it today you would earn a total of 1,105 from holding Oakmark Select Fund or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Select Fund vs. American Funds Inflation
Performance |
| Timeline |
| Oakmark Select |
| American Funds Inflation |
Oakmark Select and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Select and American Funds
The main advantage of trading using opposite Oakmark Select and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Select position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Oakmark Select vs. Goldman Sachs Clean | Oakmark Select vs. Vy Goldman Sachs | Oakmark Select vs. Gold And Precious | Oakmark Select vs. Sprott Gold Equity |
| American Funds vs. Vanguard Inflation Protected Securities | American Funds vs. Vanguard Inflation Protected Securities | American Funds vs. American Funds Inflation |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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