Correlation Between OAKMARK FUND and Exxon

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

Diversification Opportunities for OAKMARK FUND and Exxon

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between OAKMARK and Exxon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding OAKMARK FUND ADVISOR and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of OAKMARK FUND i.e., OAKMARK FUND and Exxon go up and down completely randomly.

Pair Corralation between OAKMARK FUND and Exxon

Assuming the 90 days horizon OAKMARK FUND is expected to generate 3.96 times less return on investment than Exxon. But when comparing it to its historical volatility, OAKMARK FUND ADVISOR is 1.49 times less risky than Exxon. It trades about 0.04 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,825  in Exxon Mobil Corp on September 4, 2022 and sell it today you would earn a total of  7,161  from holding Exxon Mobil Corp or generate 187.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

OAKMARK FUND ADVISOR  vs.  Exxon Mobil Corp

 Performance (%) 
       Timeline  
OAKMARK FUND ADVISOR 
OAKMARK Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in OAKMARK FUND ADVISOR are ranked lower than 5 (%) 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 2023.

OAKMARK Price Channel

Exxon Mobil Corp 
Exxon Performance
9 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Exxon revealed solid returns over the last few months and may actually be approaching a breakup point.

Exxon Price Channel

OAKMARK FUND and Exxon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with OAKMARK FUND and Exxon

The main advantage of trading using opposite OAKMARK FUND and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OAKMARK FUND position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.
OAKMARK FUND vs. Nordea Bank Abp
The idea behind OAKMARK FUND ADVISOR and Exxon Mobil Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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