Correlation Between Oakmark Select and Transamerica Financial
Can any of the company-specific risk be diversified away by investing in both Oakmark Select and Transamerica Financial 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 Transamerica Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Select and Transamerica Financial Life, you can compare the effects of market volatilities on Oakmark Select and Transamerica Financial 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 Transamerica Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Select and Transamerica Financial.
Diversification Opportunities for Oakmark Select and Transamerica Financial
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oakmark and Transamerica is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Select and Transamerica Financial Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Financial 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 are associated (or correlated) with Transamerica Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Financial has no effect on the direction of Oakmark Select i.e., Oakmark Select and Transamerica Financial go up and down completely randomly.
Pair Corralation between Oakmark Select and Transamerica Financial
Assuming the 90 days horizon Oakmark Select is expected to generate 1.49 times more return on investment than Transamerica Financial. However, Oakmark Select is 1.49 times more volatile than Transamerica Financial Life. It trades about 0.22 of its potential returns per unit of risk. Transamerica Financial Life is currently generating about 0.07 per unit of risk. If you would invest 7,715 in Oakmark Select on September 13, 2024 and sell it today you would earn a total of 697.00 from holding Oakmark Select or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Oakmark Select vs. Transamerica Financial Life
Performance |
| Timeline |
| Oakmark Select |
| Transamerica Financial |
Oakmark Select and Transamerica Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Select and Transamerica Financial
The main advantage of trading using opposite Oakmark Select and Transamerica Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Select position performs unexpectedly, Transamerica Financial 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 Transamerica Financial will offset losses from the drop in Transamerica Financial's long position.| Oakmark Select vs. Oakmark Select Fund | Oakmark Select vs. Oakmark International Fund | Oakmark Select vs. Oakmark Equity And | Oakmark Select vs. Oakmark Global 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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