Correlation Between Diamond Hill and Natixis Us

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Can any of the company-specific risk be diversified away by investing in both Diamond Hill and Natixis Us 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 Diamond Hill and Natixis Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Hill Large and Natixis Equity Opportunities, you can compare the effects of market volatilities on Diamond Hill and Natixis Us 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 Diamond Hill with a short position of Natixis Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Hill and Natixis Us.

Diversification Opportunities for Diamond Hill and Natixis Us

DiamondNatixisDiversified AwayDiamondNatixisDiversified Away100%
0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Diamond and Natixis is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Hill Large and Natixis Equity Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Equity Oppor and Diamond Hill 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 Diamond Hill Large are associated (or correlated) with Natixis Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis Equity Oppor has no effect on the direction of Diamond Hill i.e., Diamond Hill and Natixis Us go up and down completely randomly.

Pair Corralation between Diamond Hill and Natixis Us

Assuming the 90 days horizon Diamond Hill Large is expected to under-perform the Natixis Us. In addition to that, Diamond Hill is 1.17 times more volatile than Natixis Equity Opportunities. It trades about -0.14 of its total potential returns per unit of risk. Natixis Equity Opportunities is currently generating about -0.07 per unit of volatility. If you would invest  4,718  in Natixis Equity Opportunities on November 25, 2024 and sell it today you would lose (219.00) from holding Natixis Equity Opportunities or give up 4.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Diamond Hill Large  vs.  Natixis Equity Opportunities

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.15DHLYX NEFSX
       Timeline  
Diamond Hill Large 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Diamond Hill Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb323334353637
Natixis Equity Oppor 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Natixis Equity Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Natixis Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb434445464748

Diamond Hill and Natixis Us Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.27-1.75-1.23-0.71-0.190.280.81.321.842.36 0.050.100.150.200.250.30
JavaScript chart by amCharts 3.21.15DHLYX NEFSX
       Returns  

Pair Trading with Diamond Hill and Natixis Us

The main advantage of trading using opposite Diamond Hill and Natixis Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Hill position performs unexpectedly, Natixis Us 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 Natixis Us will offset losses from the drop in Natixis Us' long position.
The idea behind Diamond Hill Large and Natixis Equity Opportunities 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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