Correlation Between Nasdaq and Oakmark Bond

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

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

Diversification Opportunities for Nasdaq and Oakmark Bond

-0.17

Correlation Coefficient

Nasdaq  Oakmark Bond

Good diversification

The 3 months correlation between Nasdaq and Oakmark is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Oakmark Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Bond and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Oakmark Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Bond has no effect on the direction of Nasdaq i.e., Nasdaq and Oakmark Bond go up and down completely randomly.

Pair Corralation between Nasdaq and Oakmark Bond

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Oakmark Bond. In addition to that, Nasdaq is 5.16 times more volatile than Oakmark Bond. It trades about -0.03 of its total potential returns per unit of risk. Oakmark Bond is currently generating about 0.11 per unit of volatility. If you would invest  871.00  in Oakmark Bond on December 28, 2024 and sell it today you would earn a total of  17.00  from holding Oakmark Bond or generate 1.95% return on investment over 90 days.

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

Nasdaq Inc  vs.  Oakmark Bond

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Oakmark Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Bond are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Oakmark Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq and Oakmark Bond

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

The idea behind Nasdaq Inc and Oakmark Bond 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.