Correlation Between Oakmark International and Lsv Small
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Lsv Small 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 Lsv Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark International Small and Lsv Small Cap, you can compare the effects of market volatilities on Oakmark International and Lsv Small 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 Lsv Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Lsv Small.
Diversification Opportunities for Oakmark International and Lsv Small
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Oakmark and Lsv is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Small and Lsv Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lsv Small Cap 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 Small are associated (or correlated) with Lsv Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lsv Small Cap has no effect on the direction of Oakmark International i.e., Oakmark International and Lsv Small go up and down completely randomly.
Pair Corralation between Oakmark International and Lsv Small
Assuming the 90 days horizon Oakmark International is expected to generate 1.99 times less return on investment than Lsv Small. But when comparing it to its historical volatility, Oakmark International Small is 1.37 times less risky than Lsv Small. It trades about 0.03 of its potential returns per unit of risk. Lsv Small Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,827 in Lsv Small Cap on September 12, 2024 and sell it today you would earn a total of 209.00 from holding Lsv Small Cap or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark International Small vs. Lsv Small Cap
Performance |
| Timeline |
| Oakmark International |
| Lsv Small Cap |
Oakmark International and Lsv Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Lsv Small
The main advantage of trading using opposite Oakmark International and Lsv Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Lsv Small 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 Lsv Small will offset losses from the drop in Lsv Small's long position.| Oakmark International vs. Lsv Small Cap | Oakmark International vs. Great West Loomis Sayles | Oakmark International vs. Royce Opportunity Fund | Oakmark International vs. Fidelity Small Cap |
| Lsv Small vs. Vanguard Small Cap Value | Lsv Small vs. Vanguard Small Cap Value | Lsv Small vs. Us Small Cap | Lsv Small vs. Us Targeted Value |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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