Correlation Between Oakmark Fund and Oakmark Equity
Can any of the company-specific risk be diversified away by investing in both Oakmark Fund 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 Fund 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 Fund R6 and Oakmark Equity And, you can compare the effects of market volatilities on Oakmark Fund 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 Fund with a short position of Oakmark Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Fund and Oakmark Equity.
Diversification Opportunities for Oakmark Fund and Oakmark Equity
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oakmark and Oakmark is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Fund R6 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 Fund 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 Fund R6 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 Fund i.e., Oakmark Fund and Oakmark Equity go up and down completely randomly.
Pair Corralation between Oakmark Fund and Oakmark Equity
Assuming the 90 days horizon Oakmark Fund R6 is expected to generate 1.53 times more return on investment than Oakmark Equity. However, Oakmark Fund is 1.53 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 10,220 in Oakmark Fund R6 on August 29, 2024 and sell it today you would earn a total of 6,041 from holding Oakmark Fund R6 or generate 59.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oakmark Fund R6 vs. Oakmark Equity And
Performance |
| Timeline |
| Oakmark Fund R6 |
| Oakmark Equity And |
Oakmark Fund and Oakmark Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oakmark Fund and Oakmark Equity
The main advantage of trading using opposite Oakmark Fund and Oakmark Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Fund 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 Fund vs. Dodge Cox Stock | Oakmark Fund vs. American Mutual Fund | Oakmark Fund vs. American Funds American | Oakmark Fund 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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