Correlation Between Gold Fields and Oakmark International

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

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

Diversification Opportunities for Gold Fields and Oakmark International

0.93

Correlation Coefficient

Gold Fields  Oakmark International

Almost no diversification

The 3 months correlation between Gold and Oakmark is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Oakmark International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Gold Fields 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 Gold Fields Ltd 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 Gold Fields i.e., Gold Fields and Oakmark International go up and down completely randomly.

Pair Corralation between Gold Fields and Oakmark International

Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 2.16 times more return on investment than Oakmark International. However, Gold Fields is 2.16 times more volatile than Oakmark International. It trades about 0.33 of its potential returns per unit of risk. Oakmark International is currently generating about 0.16 per unit of risk. If you would invest  1,323  in Gold Fields Ltd on December 25, 2024 and sell it today you would earn a total of  734.00  from holding Gold Fields Ltd or generate 55.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Gold Fields Ltd  vs.  Oakmark International

Gold Fields

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Fields Ltd are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Gold Fields demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Oakmark International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark International are ranked lower than 12 (%) 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 Gold Fields and Oakmark International

The main advantage of trading using opposite Gold Fields and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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 Gold Fields Ltd and Oakmark International 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.