Correlation Between Oakmark Select and Oakmark Bond
Can any of the company-specific risk be diversified away by investing in both Oakmark Select and Oakmark Bond 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 Oakmark Bond 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 Oakmark Bond, you can compare the effects of market volatilities on Oakmark Select and Oakmark Bond 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 Oakmark Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Select and Oakmark Bond.
Diversification Opportunities for Oakmark Select and Oakmark Bond
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oakmark and Oakmark is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Select Fund and Oakmark Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Bond 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 Oakmark Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Bond has no effect on the direction of Oakmark Select i.e., Oakmark Select and Oakmark Bond go up and down completely randomly.
Pair Corralation between Oakmark Select and Oakmark Bond
Assuming the 90 days horizon Oakmark Select Fund is expected to generate 2.95 times more return on investment than Oakmark Bond. However, Oakmark Select is 2.95 times more volatile than Oakmark Bond. It trades about 0.1 of its potential returns per unit of risk. Oakmark Bond is currently generating about 0.06 per unit of risk. If you would invest 5,131 in Oakmark Select Fund on August 26, 2024 and sell it today you would earn a total of 3,181 from holding Oakmark Select Fund or generate 62.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Select Fund vs. Oakmark Bond
Performance |
| Timeline |
| Oakmark Select |
| Oakmark Bond |
Oakmark Select and Oakmark Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Select and Oakmark Bond
The main advantage of trading using opposite Oakmark Select and Oakmark Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Select position performs unexpectedly, Oakmark Bond 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 Bond will offset losses from the drop in Oakmark Bond's long position.| Oakmark Select vs. Quantitative Longshort Equity | Oakmark Select vs. Aqr Long Short Equity | Oakmark Select vs. Ultra Short Fixed Income | Oakmark Select vs. Angel Oak Ultrashort |
| Oakmark Bond vs. Oakmark Fund Advisor | Oakmark Bond vs. Oakmark Select Fund | Oakmark Bond vs. Oakmark Global Select | Oakmark Bond vs. Oakmark International 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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