Correlation Between Artisan Small and Oakmark International

Can any of the company-specific risk be diversified away by investing in both Artisan Small 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 Artisan Small and Oakmark International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Artisan Small Cap and Oakmark International Fund, you can compare the effects of market volatilities on Artisan Small 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 Artisan Small with a short position of Oakmark International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Small and Oakmark International.

Diversification Opportunities for Artisan Small and Oakmark International

-0.61

Correlation Coefficient

Artisan Small  Oakmark International

Excellent diversification

The 3 months correlation between Artisan and Oakmark is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Small Cap and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Artisan Small 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 Artisan Small Cap 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 Artisan Small i.e., Artisan Small and Oakmark International go up and down completely randomly.

Pair Corralation between Artisan Small and Oakmark International

Assuming the 90 days horizon Artisan Small Cap is expected to under-perform the Oakmark International. In addition to that, Artisan Small is 1.4 times more volatile than Oakmark International Fund. It trades about -0.1 of its total potential returns per unit of risk. Oakmark International Fund is currently generating about 0.14 per unit of volatility. If you would invest  2,492  in Oakmark International Fund on December 29, 2024 and sell it today you would earn a total of  244.00  from holding Oakmark International Fund or generate 9.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Artisan Small Cap  vs.  Oakmark International Fund

Artisan Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Artisan Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Oakmark International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark International Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Oakmark International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Artisan Small and Oakmark International

The main advantage of trading using opposite Artisan Small and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Small 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.

The idea behind Artisan Small Cap and Oakmark International Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.