Correlation Between Oakmark International and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Oakmark International and Sterling Capital 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 International and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oakmark International Fund and Sterling Capital Behavioral, you can compare the effects of market volatilities on Oakmark International and Sterling Capital 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 International with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark International and Sterling Capital.
Diversification Opportunities for Oakmark International and Sterling Capital
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Oakmark and Sterling is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Fund and Sterling Capital Behavioral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Beh and Oakmark 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 Oakmark International Fund are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Beh has no effect on the direction of Oakmark International i.e., Oakmark International and Sterling Capital go up and down completely randomly.
Pair Corralation between Oakmark International and Sterling Capital
Assuming the 90 days horizon Oakmark International is expected to generate 2.45 times less return on investment than Sterling Capital. In addition to that, Oakmark International is 1.19 times more volatile than Sterling Capital Behavioral. It trades about 0.05 of its total potential returns per unit of risk. Sterling Capital Behavioral is currently generating about 0.16 per unit of volatility. If you would invest 922.00 in Sterling Capital Behavioral on March 8, 2024 and sell it today you would earn a total of 123.00 from holding Sterling Capital Behavioral or generate 13.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 99.19% |
Values | Daily Returns |
Oakmark International Fund vs. Sterling Capital Behavioral
Performance |
Timeline |
Oakmark International |
Sterling Capital Beh |
Oakmark International and Sterling Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Oakmark International and Sterling Capital
The main advantage of trading using opposite Oakmark International and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.Oakmark International vs. Dodge Stock Fund | Oakmark International vs. Dodge Income Fund | Oakmark International vs. Dodge Balanced Fund | Oakmark International vs. The Fairholme Fund |
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Check out your portfolio center.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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