Correlation Between Qs Moderate and Oakmark International

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

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

Diversification Opportunities for Qs Moderate and Oakmark International

-0.32

Correlation Coefficient

Qs Moderate  Oakmark International

Very good diversification

The 3 months correlation between SCGCX and Oakmark is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Qs Moderate Growth and Oakmark International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Qs Moderate 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 Qs Moderate Growth are associated (or correlated) with Oakmark International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark International has no effect on the direction of Qs Moderate i.e., Qs Moderate and Oakmark International go up and down completely randomly.

Pair Corralation between Qs Moderate and Oakmark International

Assuming the 90 days horizon Qs Moderate Growth is expected to under-perform the Oakmark International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Qs Moderate Growth is 1.23 times less risky than Oakmark International. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Oakmark International Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,499  in Oakmark International Fund on December 26, 2024 and sell it today you would earn a total of  267.00  from holding Oakmark International Fund or generate 10.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Qs Moderate Growth  vs.  Oakmark International Fund

Qs Moderate Growth

Risk-Adjusted Performance

Very Weak

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

Oakmark International

Risk-Adjusted Performance

Good

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

Pair Trading with Qs Moderate and Oakmark International

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

The idea behind Qs Moderate Growth and Oakmark International Fund 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.