Correlation Between Oakmark Select and Oakmark Equity
Can any of the company-specific risk be diversified away by investing in both Oakmark Select and Oakmark Equity 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 Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark Select and Oakmark Equity And, you can compare the effects of market volatilities on Oakmark Select and Oakmark Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Select and Oakmark Equity.
Diversification Opportunities for Oakmark Select and Oakmark Equity
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oakmark and Oakmark is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Select and Oakmark Equity And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Equity And 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 Oakmark Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Equity And has no effect on the direction of Oakmark Select i.e., Oakmark Select and Oakmark Equity go up and down completely randomly.
Pair Corralation between Oakmark Select and Oakmark Equity
Assuming the 90 days horizon Oakmark Select is expected to generate 1.72 times more return on investment than Oakmark Equity. However, Oakmark Select is 1.72 times more volatile than Oakmark Equity And. It trades about 0.1 of its potential returns per unit of risk. Oakmark Equity And is currently generating about 0.09 per unit of risk. If you would invest 5,027 in Oakmark Select on August 29, 2024 and sell it today you would earn a total of 3,467 from holding Oakmark Select or generate 68.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Oakmark Select vs. Oakmark Equity And
Performance |
| Timeline |
| Oakmark Select |
| Oakmark Equity And |
Oakmark Select and Oakmark Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Select and Oakmark Equity
The main advantage of trading using opposite Oakmark Select and Oakmark Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Select position performs unexpectedly, Oakmark Equity 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 Equity will offset losses from the drop in Oakmark Equity's long position.| Oakmark Select vs. Dodge Cox Stock | Oakmark Select vs. American Mutual Fund | Oakmark Select vs. American Funds American | Oakmark Select vs. American Funds American |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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