Correlation Between Praxis Small and Natixis Oakmark

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

By analyzing existing cross correlation between Praxis Small Cap and Natixis Oakmark Intl, you can compare the effects of market volatilities on Praxis Small 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 Praxis Small with a short position of Natixis Oakmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Praxis Small and Natixis Oakmark.

Diversification Opportunities for Praxis Small and Natixis Oakmark

-0.33

Correlation Coefficient

Praxis Small  Natixis Oakmark

Very good diversification

The 3 months correlation between Praxis and Natixis is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Praxis Small Cap and Natixis Oakmark Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Oakmark Intl and Praxis Small 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 Praxis Small Cap 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 Intl has no effect on the direction of Praxis Small i.e., Praxis Small and Natixis Oakmark go up and down completely randomly.

Pair Corralation between Praxis Small and Natixis Oakmark

Assuming the 90 days horizon Praxis Small Cap is expected to under-perform the Natixis Oakmark. In addition to that, Praxis Small is 1.01 times more volatile than Natixis Oakmark Intl. It trades about -0.11 of its total potential returns per unit of risk. Natixis Oakmark Intl is currently generating about 0.21 per unit of volatility. If you would invest  1,334  in Natixis Oakmark Intl on December 20, 2024 and sell it today you would earn a total of  180.00  from holding Natixis Oakmark Intl or generate 13.49% return on investment over 90 days.

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

Praxis Small Cap  vs.  Natixis Oakmark Intl

Praxis Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Praxis Small Cap 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.

Natixis Oakmark Intl

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Oakmark Intl are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Natixis Oakmark showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Praxis Small and Natixis Oakmark

The main advantage of trading using opposite Praxis Small and Natixis Oakmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Praxis Small 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 Praxis Small Cap and Natixis Oakmark Intl 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 the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.