Correlation Between Artisan International and Oakmark Global

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

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

Diversification Opportunities for Artisan International and Oakmark Global

0.59

Correlation Coefficient

Artisan International  Oakmark Global

Very weak diversification

The 3 months correlation between ARTISAN and Oakmark is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Artisan International Value and Oakmark Global Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Global Select and Artisan International 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 Artisan International Value are associated (or correlated) with Oakmark Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Global Select has no effect on the direction of Artisan International i.e., Artisan International and Oakmark Global go up and down completely randomly.

Pair Corralation between Artisan International and Oakmark Global

Assuming the 90 days horizon Artisan International Value is expected to under-perform the Oakmark Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Artisan International Value is 1.06 times less risky than Oakmark Global. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Oakmark Global Select is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,312  in Oakmark Global Select on September 2, 2024 and sell it today you would lose (1.00) from holding Oakmark Global Select or give up 0.04% of portfolio value over 90 days.

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

Artisan International Value  vs.  Oakmark Global Select

Artisan International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artisan International Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Artisan International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oakmark Global Select

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Artisan International and Oakmark Global

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

The idea behind Artisan International Value and Oakmark Global Select 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.