Correlation Between Oakmark International and Oakmark Global
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Oakmark Global 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 Oakmark Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark International and Oakmark Global Fund, you can compare the effects of market volatilities on Oakmark International and Oakmark Global 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 Oakmark Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Oakmark Global.
Diversification Opportunities for Oakmark International and Oakmark Global
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oakmark and Oakmark is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International and Oakmark Global Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Global 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 are associated (or correlated) with Oakmark Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Global has no effect on the direction of Oakmark International i.e., Oakmark International and Oakmark Global go up and down completely randomly.
Pair Corralation between Oakmark International and Oakmark Global
Assuming the 90 days horizon Oakmark International is expected to under-perform the Oakmark Global. In addition to that, Oakmark International is 1.05 times more volatile than Oakmark Global Fund. It trades about -0.01 of its total potential returns per unit of risk. Oakmark Global Fund is currently generating about 0.02 per unit of volatility. If you would invest 3,180 in Oakmark Global Fund on August 26, 2024 and sell it today you would earn a total of 176.00 from holding Oakmark Global Fund or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark International vs. Oakmark Global Fund
Performance |
| Timeline |
| Oakmark International |
| Oakmark Global |
Oakmark International and Oakmark Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark International and Oakmark Global
The main advantage of trading using opposite Oakmark International and Oakmark Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Oakmark Global 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 Global will offset losses from the drop in Oakmark Global's long position.| Oakmark International vs. Oakmark Fund Investor | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark International Small | Oakmark International vs. Oakmark Global Fund |
| Oakmark Global vs. Oakmark Equity And | Oakmark Global vs. Oakmark International Small | Oakmark Global vs. Oakmark Select Fund | Oakmark Global vs. Oakmark International Fund |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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