Correlation Between Total Return and Oakmark Bond
Can any of the company-specific risk be diversified away by investing in both Total Return and Oakmark Bond 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 Total Return and Oakmark Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Return Fund and Oakmark Bond, you can compare the effects of market volatilities on Total Return and Oakmark Bond 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 Total Return with a short position of Oakmark Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Return and Oakmark Bond.
Diversification Opportunities for Total Return and Oakmark Bond
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Total and Oakmark is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Fund and Oakmark Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Bond and Total Return 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 Total Return Fund are associated (or correlated) with Oakmark Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Bond has no effect on the direction of Total Return i.e., Total Return and Oakmark Bond go up and down completely randomly.
Pair Corralation between Total Return and Oakmark Bond
Assuming the 90 days horizon Total Return is expected to generate 1.25 times less return on investment than Oakmark Bond. In addition to that, Total Return is 1.16 times more volatile than Oakmark Bond. It trades about 0.04 of its total potential returns per unit of risk. Oakmark Bond is currently generating about 0.05 per unit of volatility. If you would invest 823.00 in Oakmark Bond on September 1, 2024 and sell it today you would earn a total of 74.00 from holding Oakmark Bond or generate 8.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Total Return Fund vs. Oakmark Bond
Performance |
| Timeline |
| Total Return |
| Oakmark Bond |
Total Return and Oakmark Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Return and Oakmark Bond
The main advantage of trading using opposite Total Return and Oakmark Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Return position performs unexpectedly, Oakmark Bond 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 Bond will offset losses from the drop in Oakmark Bond's long position.| Total Return vs. Ep Emerging Markets | Total Return vs. Goldman Sachs Emerging | Total Return vs. Angel Oak Multi Strategy | Total Return vs. Pace International Emerging |
| Oakmark Bond vs. Oakmark International Fund | Oakmark Bond vs. Oakmark Fund Advisor | Oakmark Bond vs. Oakmark Select Fund | Oakmark Bond 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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