Correlation Between Oakmark Select and Artisan International

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

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

Diversification Opportunities for Oakmark Select and Artisan International

-0.25

Correlation Coefficient

Oakmark Select  Artisan International

Very good diversification

The 3 months correlation between Oakmark and Artisan is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Select Fund and Artisan International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan International and Oakmark Select 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 Select Fund are associated (or correlated) with Artisan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan International has no effect on the direction of Oakmark Select i.e., Oakmark Select and Artisan International go up and down completely randomly.

Pair Corralation between Oakmark Select and Artisan International

Assuming the 90 days horizon Oakmark Select Fund is expected to generate 1.4 times more return on investment than Artisan International. However, Oakmark Select is 1.4 times more volatile than Artisan International Fund. It trades about 0.21 of its potential returns per unit of risk. Artisan International Fund is currently generating about 0.03 per unit of risk. If you would invest  7,494  in Oakmark Select Fund on September 2, 2024 and sell it today you would earn a total of  968.00  from holding Oakmark Select Fund or generate 12.92% return on investment over 90 days.

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

Oakmark Select Fund  vs.  Artisan International Fund

Oakmark Select

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Select Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Oakmark Select may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Artisan International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan International Fund are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Artisan International 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 Select and Artisan International

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

The idea behind Oakmark Select Fund and Artisan 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.