Correlation Between OAKMARK INTERNATIONAL and STERLING CAPITAL

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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 CORPORATE, 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

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between OAKMARK and STERLING is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding OAKMARK INTERNATIONAL FUND and STERLING CAPITAL CORPORATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STERLING CAPITAL COR 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 COR 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 FUND is expected to generate 1.93 times more return on investment than STERLING CAPITAL. However, OAKMARK INTERNATIONAL is 1.93 times more volatile than STERLING CAPITAL CORPORATE. It trades about -0.02 of its potential returns per unit of risk. STERLING CAPITAL CORPORATE is currently generating about -0.1 per unit of risk. If you would invest  2,771  in OAKMARK INTERNATIONAL FUND on September 4, 2022 and sell it today you would lose (337.00)  from holding OAKMARK INTERNATIONAL FUND or give up 12.16% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

OAKMARK INTERNATIONAL FUND  vs.  STERLING CAPITAL CORPORATE

 Performance (%) 
       Timeline  
OAKMARK INTERNATIONAL 
OAKMARK Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in OAKMARK INTERNATIONAL FUND are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unsteady forward indicators, OAKMARK INTERNATIONAL showed solid returns over the last few months and may actually be approaching a breakup point.

OAKMARK Price Channel

STERLING CAPITAL COR 
STERLING Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in STERLING CAPITAL CORPORATE are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, STERLING CAPITAL is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

STERLING Price Channel

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.
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The idea behind OAKMARK INTERNATIONAL FUND and STERLING CAPITAL CORPORATE 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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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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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