Correlation Between Oakmark Fund and Harris Associates

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

By analyzing existing cross correlation between Oakmark Fund Advisor and Harris Associates Investment, you can compare the effects of market volatilities on Oakmark Fund and Harris Associates 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 Harris Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Fund and Harris Associates.

Diversification Opportunities for Oakmark Fund and Harris Associates

-0.7

Correlation Coefficient

Oakmark Fund  Harris Associates

Excellent diversification

The 3 months correlation between Oakmark and Harris is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Fund Advisor and Harris Associates Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harris Associates 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 Advisor are associated (or correlated) with Harris Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harris Associates has no effect on the direction of Oakmark Fund i.e., Oakmark Fund and Harris Associates go up and down completely randomly.

Pair Corralation between Oakmark Fund and Harris Associates

Assuming the 90 days horizon Oakmark Fund Advisor is expected to generate 2.88 times more return on investment than Harris Associates. However, Oakmark Fund is 2.88 times more volatile than Harris Associates Investment. It trades about 0.17 of its potential returns per unit of risk. Harris Associates Investment is currently generating about -0.05 per unit of risk. If you would invest  14,823  in Oakmark Fund Advisor on September 4, 2024 and sell it today you would earn a total of  1,382  from holding Oakmark Fund Advisor or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Oakmark Fund Advisor  vs.  Harris Associates Investment

Oakmark Fund Advisor

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Fund Advisor 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.

Harris Associates

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harris Associates Investment has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Harris Associates 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 Harris Associates

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

The idea behind Oakmark Fund Advisor and Harris Associates Investment 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.