Correlation Between Dws Equity and Oakmark International

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

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

Diversification Opportunities for Dws Equity and Oakmark International

-0.14

Correlation Coefficient

Dws Equity  Oakmark International

Good diversification

The 3 months correlation between Dws and Oakmark is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dws Equity Sector and Oakmark International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark International and Dws 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 Dws Equity Sector 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 Dws Equity i.e., Dws Equity and Oakmark International go up and down completely randomly.

Pair Corralation between Dws Equity and Oakmark International

Assuming the 90 days horizon Dws Equity Sector is expected to under-perform the Oakmark International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dws Equity Sector is 1.24 times less risky than Oakmark International. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Oakmark International Small is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,774  in Oakmark International Small on December 20, 2024 and sell it today you would earn a total of  251.00  from holding Oakmark International Small or generate 14.15% return on investment over 90 days.

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

Dws Equity Sector  vs.  Oakmark International Small

Dws Equity Sector

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dws Equity Sector has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dws Equity 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

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark International Small are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Oakmark International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dws Equity and Oakmark International

The main advantage of trading using opposite Dws Equity and Oakmark International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dws Equity 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 Dws Equity Sector and Oakmark International Small 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.