Correlation Between Oakmark Fund and Fidelity Convertible

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

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

Diversification Opportunities for Oakmark Fund and Fidelity Convertible

0.47

Correlation Coefficient

Oakmark Fund  Fidelity Convertible

Very weak diversification

The 3 months correlation between Oakmark and Fidelity is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Fund Institutional and Fidelity Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Convertible and Oakmark Fund 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 Fund Institutional are associated (or correlated) with Fidelity Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Convertible has no effect on the direction of Oakmark Fund i.e., Oakmark Fund and Fidelity Convertible go up and down completely randomly.

Pair Corralation between Oakmark Fund and Fidelity Convertible

Assuming the 90 days horizon Oakmark Fund Institutional is expected to generate 0.87 times more return on investment than Fidelity Convertible. However, Oakmark Fund Institutional is 1.16 times less risky than Fidelity Convertible. It trades about 0.03 of its potential returns per unit of risk. Fidelity Vertible Securities is currently generating about -0.11 per unit of risk. If you would invest  15,226  in Oakmark Fund Institutional on December 22, 2024 and sell it today you would earn a total of  200.00  from holding Oakmark Fund Institutional or generate 1.31% return on investment over 90 days.

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

Oakmark Fund Institutional  vs.  Fidelity Vertible Securities

Oakmark Fund Institu

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Fund Institutional are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Oakmark Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Convertible

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Vertible Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Oakmark Fund and Fidelity Convertible

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

The idea behind Oakmark Fund Institutional and Fidelity Vertible Securities 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.