Correlation Between Hotchkis Wiley and Oakmark Select

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

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

Diversification Opportunities for Hotchkis Wiley and Oakmark Select

-0.05

Correlation Coefficient

Hotchkis Wiley  Oakmark Select

Good diversification

The 3 months correlation between Hotchkis and OAKMARK is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hotchkis Wiley International and Oakmark Select Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Select and Hotchkis Wiley 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 Hotchkis Wiley International are associated (or correlated) with Oakmark Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Select has no effect on the direction of Hotchkis Wiley i.e., Hotchkis Wiley and Oakmark Select go up and down completely randomly.

Pair Corralation between Hotchkis Wiley and Oakmark Select

Assuming the 90 days horizon Hotchkis Wiley International is expected to generate 0.87 times more return on investment than Oakmark Select. However, Hotchkis Wiley International is 1.15 times less risky than Oakmark Select. It trades about 0.15 of its potential returns per unit of risk. Oakmark Select Fund is currently generating about 0.01 per unit of risk. If you would invest  942.00  in Hotchkis Wiley International on December 27, 2024 and sell it today you would earn a total of  69.00  from holding Hotchkis Wiley International or generate 7.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Hotchkis Wiley International  vs.  Oakmark Select Fund

Hotchkis Wiley Inter

Risk-Adjusted Performance

Good

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

Oakmark Select

Risk-Adjusted Performance

Weak

Over the last 90 days Oakmark Select Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Oakmark Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hotchkis Wiley and Oakmark Select

The main advantage of trading using opposite Hotchkis Wiley and Oakmark Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotchkis Wiley position performs unexpectedly, Oakmark Select 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 Select will offset losses from the drop in Oakmark Select's long position.

The idea behind Hotchkis Wiley International and Oakmark Select 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.