Correlation Between Oakmark Equity and Oakmark Fund

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

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

Diversification Opportunities for Oakmark Equity and Oakmark Fund

0.94

Correlation Coefficient

Oakmark Equity  Oakmark Fund

Almost no diversification

The 3 months correlation between Oakmark and Oakmark is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Equity And and Oakmark Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Fund Institu and Oakmark Equity 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 Equity And 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 Institu has no effect on the direction of Oakmark Equity i.e., Oakmark Equity and Oakmark Fund go up and down completely randomly.

Pair Corralation between Oakmark Equity and Oakmark Fund

Assuming the 90 days horizon Oakmark Equity And is expected to generate 0.67 times more return on investment than Oakmark Fund. However, Oakmark Equity And is 1.5 times less risky than Oakmark Fund. It trades about -0.03 of its potential returns per unit of risk. Oakmark Fund Institutional is currently generating about -0.03 per unit of risk. If you would invest  3,726  in Oakmark Equity And on December 4, 2024 and sell it today you would lose (33.00) from holding Oakmark Equity And or give up 0.89% of portfolio value over 90 days.

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

Oakmark Equity And  vs.  Oakmark Fund Institutional

Oakmark Equity And

Risk-Adjusted Performance

Very Weak

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

Oakmark Fund Institu

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oakmark Fund Institutional has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Oakmark Equity and Oakmark Fund

The main advantage of trading using opposite Oakmark Equity and Oakmark Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Equity 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 Oakmark Equity And and Oakmark Fund Institutional 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.