Correlation Between Oakmark Fund and Nuveen Arizona

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

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

Diversification Opportunities for Oakmark Fund and Nuveen Arizona

-0.17

Correlation Coefficient

Oakmark Fund  Nuveen Arizona

Good diversification

The 3 months correlation between Oakmark and Nuveen is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Fund Institutional and Nuveen Arizona Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Arizona Municipal and Oakmark Fund 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 Fund Institutional are associated (or correlated) with Nuveen Arizona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Arizona Municipal has no effect on the direction of Oakmark Fund i.e., Oakmark Fund and Nuveen Arizona go up and down completely randomly.

Pair Corralation between Oakmark Fund and Nuveen Arizona

Assuming the 90 days horizon Oakmark Fund Institutional is expected to generate 3.63 times more return on investment than Nuveen Arizona. However, Oakmark Fund is 3.63 times more volatile than Nuveen Arizona Municipal. It trades about 0.17 of its potential returns per unit of risk. Nuveen Arizona Municipal is currently generating about 0.09 per unit of risk. If you would invest  14,915  in Oakmark Fund Institutional on September 3, 2024 and sell it today you would earn a total of  1,387  from holding Oakmark Fund Institutional or generate 9.3% return on investment over 90 days.

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

Oakmark Fund Institutional  vs.  Nuveen Arizona Municipal

Oakmark Fund Institu

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Fund Institutional are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Oakmark Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nuveen Arizona Municipal

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Arizona Municipal are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Arizona 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 Fund and Nuveen Arizona

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

The idea behind Oakmark Fund Institutional and Nuveen Arizona Municipal 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.