Correlation Between Western Assets and Oakmark International
Can any of the company-specific risk be diversified away by investing in both Western Assets 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 Western Assets and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Assets Emerging and Oakmark International Fund, you can compare the effects of market volatilities on Western Assets 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 Western Assets with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Oakmark International.
Diversification Opportunities for Western Assets and Oakmark International
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and Oakmark is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Western Assets 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 Western Assets Emerging 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 Western Assets i.e., Western Assets and Oakmark International go up and down completely randomly.
Pair Corralation between Western Assets and Oakmark International
Assuming the 90 days horizon Western Assets is expected to generate 14.91 times less return on investment than Oakmark International. But when comparing it to its historical volatility, Western Assets Emerging is 3.18 times less risky than Oakmark International. It trades about 0.08 of its potential returns per unit of risk. Oakmark International Fund is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,456 in Oakmark International Fund on November 4, 2024 and sell it today you would earn a total of 188.00 from holding Oakmark International Fund or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Oakmark International Fund
Performance |
| Timeline |
| Western Assets Emerging |
| Oakmark International |
Western Assets and Oakmark International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Oakmark International
The main advantage of trading using opposite Western Assets and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets 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.| Western Assets vs. Blackrock Large Cap | Western Assets vs. Tiaa Cref Large Cap Value | Western Assets vs. Ab Large Cap | Western Assets vs. Americafirst Large Cap |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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