Correlation Between Oakmark Select and Crawford Dividend

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

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

Diversification Opportunities for Oakmark Select and Crawford Dividend

0.92

Correlation Coefficient

Oakmark Select  Crawford Dividend

Almost no diversification

The 3 months correlation between Oakmark and Crawford is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Select Fund and Crawford Dividend Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford Dividend and Oakmark Select 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 Oakmark Select Fund are associated (or correlated) with Crawford Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford Dividend has no effect on the direction of Oakmark Select i.e., Oakmark Select and Crawford Dividend go up and down completely randomly.

Pair Corralation between Oakmark Select and Crawford Dividend

Assuming the 90 days horizon Oakmark Select is expected to generate 1.19 times less return on investment than Crawford Dividend. But when comparing it to its historical volatility, Oakmark Select Fund is 1.23 times less risky than Crawford Dividend. It trades about 0.07 of its potential returns per unit of risk. Crawford Dividend Opportunity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  4,431  in Crawford Dividend Opportunity on September 24, 2024 and sell it today you would earn a total of  538.00  from holding Crawford Dividend Opportunity or generate 12.14% return on investment over 90 days.

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

Oakmark Select Fund  vs.  Crawford Dividend Opportunity

Oakmark Select

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Select Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. 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.

Crawford Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Oakmark Select and Crawford Dividend

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

The idea behind Oakmark Select Fund and Crawford Dividend Opportunity 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.