Correlation Between Selected American and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Selected American 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 Selected American and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Selected American Shares and Oakmark International Fund, you can compare the effects of market volatilities on Selected American 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 Selected American with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selected American and Oakmark International.
Diversification Opportunities for Selected American and Oakmark International
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Selected and Oakmark is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Selected American Shares and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Selected American 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 Selected American Shares 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 Selected American i.e., Selected American and Oakmark International go up and down completely randomly.
Pair Corralation between Selected American and Oakmark International
Assuming the 90 days horizon Selected American Shares is expected to generate 0.83 times more return on investment than Oakmark International. However, Selected American Shares is 1.2 times less risky than Oakmark International. It trades about 0.27 of its potential returns per unit of risk. Oakmark International Fund is currently generating about -0.07 per unit of risk. If you would invest 4,211 in Selected American Shares on September 1, 2024 and sell it today you would earn a total of 251.00 from holding Selected American Shares or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Selected American Shares vs. Oakmark International Fund
Performance |
| Timeline |
| Selected American Shares |
| Oakmark International |
Selected American and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Selected American and Oakmark International
The main advantage of trading using opposite Selected American and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selected American 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.| Selected American vs. Marsico Focus Fund | Selected American vs. Artisan International Fund | Selected American vs. Third Avenue Value | Selected American vs. Oakmark Select Fund |
| Oakmark International vs. Oakmark Fund Investor | Oakmark International vs. Oakmark Select Fund | Oakmark International vs. Oakmark International Small | Oakmark International 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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