Correlation Between Smead Value and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Smead Value 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 Smead Value and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smead Value Fund and Oakmark International Fund, you can compare the effects of market volatilities on Smead Value 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 Smead Value with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smead Value and Oakmark International.
Diversification Opportunities for Smead Value and Oakmark International
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Smead and Oakmark is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Smead Value Fund and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Smead Value 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 Smead Value Fund 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 Smead Value i.e., Smead Value and Oakmark International go up and down completely randomly.
Pair Corralation between Smead Value and Oakmark International
Assuming the 90 days horizon Smead Value Fund is expected to generate 0.79 times more return on investment than Oakmark International. However, Smead Value Fund is 1.26 times less risky than Oakmark International. It trades about 0.04 of its potential returns per unit of risk. Oakmark International Fund is currently generating about -0.2 per unit of risk. If you would invest 8,473 in Smead Value Fund on August 31, 2024 and sell it today you would earn a total of 91.00 from holding Smead Value Fund or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smead Value Fund vs. Oakmark International Fund
Performance |
| Timeline |
| Smead Value Fund |
| Oakmark International |
Smead Value and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smead Value and Oakmark International
The main advantage of trading using opposite Smead Value and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smead Value 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.| Smead Value vs. Oakmark International Fund | Smead Value vs. Intrepid Endurance Fund | Smead Value vs. HUMANA INC | Smead Value vs. Aquagold International |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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