Correlation Between Oakmark Fund and Walmart

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Can any of the company-specific risk be diversified away by investing in both Oakmark Fund and Walmart 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 Walmart 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 Walmart, you can compare the effects of market volatilities on Oakmark Fund and Walmart 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 Walmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oakmark Fund and Walmart.

Diversification Opportunities for Oakmark Fund and Walmart

0.25
  Correlation Coefficient

Modest diversification

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

Pair Corralation between Oakmark Fund and Walmart

Assuming the 90 days horizon Oakmark Fund Advisor is expected to generate 0.55 times more return on investment than Walmart. However, Oakmark Fund Advisor is 1.82 times less risky than Walmart. It trades about 0.49 of its potential returns per unit of risk. Walmart is currently generating about 0.08 per unit of risk. If you would invest  9,743  in Oakmark Fund Advisor on May 17, 2022 and sell it today you would earn a total of  1,317  from holding Oakmark Fund Advisor or generate 13.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Oakmark Fund Advisor  vs.  Walmart

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

Oakmark Price Channel

Walmart 
Walmart Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Walmart are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, Walmart is not utilizing all of its potentials. The new stock price uproar, may contribute to short-horizon losses for the private investors.

Walmart Price Channel

Oakmark Fund and Walmart Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oakmark Fund and Walmart

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

Oakmark Fund Advisor

Pair trading matchups for Oakmark Fund

The idea behind Oakmark Fund Advisor and Walmart 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.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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