Correlation Between Oakmark Global and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Oakmark Global and Growth Opportunities 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 Global and Growth Opportunities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Global Select and Growth Opportunities Fund, you can compare the effects of market volatilities on Oakmark Global and Growth Opportunities 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 Global with a short position of Growth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Global and Growth Opportunities.
Diversification Opportunities for Oakmark Global and Growth Opportunities
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Oakmark and Growth is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Global Select and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities and Oakmark Global 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 Global Select are associated (or correlated) with Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Oakmark Global i.e., Oakmark Global and Growth Opportunities go up and down completely randomly.
Pair Corralation between Oakmark Global and Growth Opportunities
Assuming the 90 days horizon Oakmark Global is expected to generate 2.24 times less return on investment than Growth Opportunities. But when comparing it to its historical volatility, Oakmark Global Select is 1.26 times less risky than Growth Opportunities. It trades about 0.06 of its potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,358 in Growth Opportunities Fund on September 3, 2024 and sell it today you would earn a total of 2,498 from holding Growth Opportunities Fund or generate 74.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Global Select vs. Growth Opportunities Fund
Performance |
| Timeline |
| Oakmark Global Select |
| Growth Opportunities |
Oakmark Global and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Global and Growth Opportunities
The main advantage of trading using opposite Oakmark Global and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Global position performs unexpectedly, Growth Opportunities 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 Growth Opportunities will offset losses from the drop in Growth Opportunities' long position.| Oakmark Global vs. Hennessy Nerstone Mid | Oakmark Global vs. Columbia Small Cap | Oakmark Global vs. Vanguard Small Cap Value | Oakmark Global vs. Victory Rs Partners |
| Growth Opportunities vs. Victory Rs Partners | Growth Opportunities vs. Lord Abbett Small | Growth Opportunities vs. Hennessy Nerstone Mid | Growth Opportunities vs. Fpa Queens Road |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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