Correlation Between Catalyst/millburn and Natixis Oakmark

Can any of the company-specific risk be diversified away by investing in both Catalyst/millburn and Natixis Oakmark 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 Catalyst/millburn and Natixis Oakmark into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Catalystmillburn Hedge Strategy and Natixis Oakmark International, you can compare the effects of market volatilities on Catalyst/millburn and Natixis Oakmark 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 Catalyst/millburn with a short position of Natixis Oakmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Catalyst/millburn and Natixis Oakmark.

Diversification Opportunities for Catalyst/millburn and Natixis Oakmark

-0.43

Correlation Coefficient

Catalyst/millburn  Natixis Oakmark

Very good diversification

The 3 months correlation between Catalyst/millburn and Natixis is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Catalystmillburn Hedge Strateg and Natixis Oakmark International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Oakmark Inte and Catalyst/millburn 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 Catalystmillburn Hedge Strategy are associated (or correlated) with Natixis Oakmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis Oakmark Inte has no effect on the direction of Catalyst/millburn i.e., Catalyst/millburn and Natixis Oakmark go up and down completely randomly.

Pair Corralation between Catalyst/millburn and Natixis Oakmark

Assuming the 90 days horizon Catalystmillburn Hedge Strategy is expected to generate 0.63 times more return on investment than Natixis Oakmark. However, Catalystmillburn Hedge Strategy is 1.59 times less risky than Natixis Oakmark. It trades about 0.05 of its potential returns per unit of risk. Natixis Oakmark International is currently generating about -0.14 per unit of risk. If you would invest  3,846  in Catalystmillburn Hedge Strategy on October 10, 2024 and sell it today you would earn a total of  74.00  from holding Catalystmillburn Hedge Strategy or generate 1.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Catalystmillburn Hedge Strateg  vs.  Natixis Oakmark International

Catalystmillburn Hedge

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Catalyst/millburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Natixis Oakmark Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Natixis Oakmark International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Catalyst/millburn and Natixis Oakmark

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

The idea behind Catalystmillburn Hedge Strategy and Natixis Oakmark International 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.