Correlation Between Old Westbury and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Oakmark International 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 Old Westbury and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Municipal and Oakmark International Small, you can compare the effects of market volatilities on Old Westbury and Oakmark International 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 Old Westbury with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Oakmark International.
Diversification Opportunities for Old Westbury and Oakmark International
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Oakmark is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Oakmark International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Old Westbury 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 Old Westbury Municipal are associated (or correlated) with Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Old Westbury i.e., Old Westbury and Oakmark International go up and down completely randomly.
Pair Corralation between Old Westbury and Oakmark International
Assuming the 90 days horizon Old Westbury is expected to generate 1.83 times less return on investment than Oakmark International. But when comparing it to its historical volatility, Old Westbury Municipal is 6.83 times less risky than Oakmark International. It trades about 0.58 of its potential returns per unit of risk. Oakmark International Small is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,958 in Oakmark International Small on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Oakmark International Small or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Oakmark International Small
Performance |
| Timeline |
| Old Westbury Municipal |
| Oakmark International |
Old Westbury and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Oakmark International
The main advantage of trading using opposite Old Westbury and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Oakmark International 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 International will offset losses from the drop in Oakmark International's long position.| Old Westbury vs. Boston Partners Small | Old Westbury vs. Royce Opportunity Fund | Old Westbury vs. Queens Road Small | Old Westbury vs. Lsv Small Cap |
| Oakmark International vs. Oakmark International Fund | Oakmark International vs. Oakmark Global Fund | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark Global Select |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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