Correlation Between Hotchkis Wiley and Oakmark Fund

Can any of the company-specific risk be diversified away by investing in both Hotchkis Wiley and Oakmark Fund 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 Fund 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 Fund Investor, you can compare the effects of market volatilities on Hotchkis Wiley and Oakmark Fund 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 Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotchkis Wiley and Oakmark Fund.

Diversification Opportunities for Hotchkis Wiley and Oakmark Fund

-0.49

Correlation Coefficient

Hotchkis Wiley  Oakmark Fund

Very good diversification

The 3 months correlation between Hotchkis and Oakmark is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hotchkis Wiley International and Oakmark Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Fund Investor 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 Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Fund Investor has no effect on the direction of Hotchkis Wiley i.e., Hotchkis Wiley and Oakmark Fund go up and down completely randomly.

Pair Corralation between Hotchkis Wiley and Oakmark Fund

Assuming the 90 days horizon Hotchkis Wiley International is expected to under-perform the Oakmark Fund. In addition to that, Hotchkis Wiley is 3.83 times more volatile than Oakmark Fund Investor. It trades about -0.14 of its total potential returns per unit of risk. Oakmark Fund Investor is currently generating about 0.15 per unit of volatility. If you would invest  14,768  in Oakmark Fund Investor on September 14, 2024 and sell it today you would earn a total of  1,132  from holding Oakmark Fund Investor or generate 7.67% return on investment over 90 days.

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

Hotchkis Wiley International  vs.  Oakmark Fund Investor

Hotchkis Wiley Inter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hotchkis Wiley International has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Oakmark Fund Investor

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Fund Investor are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Oakmark Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hotchkis Wiley and Oakmark Fund

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

The idea behind Hotchkis Wiley International and Oakmark Fund Investor 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.