Correlation Between Natixis Oakmark and Aam Select

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

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

Diversification Opportunities for Natixis Oakmark and Aam Select

0.89

Correlation Coefficient

Natixis Oakmark  Aam Select

Very poor diversification

The 3 months correlation between Natixis and Aam is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Natixis Oakmark International and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income and Natixis Oakmark 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 Natixis Oakmark International are associated (or correlated) with Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Natixis Oakmark i.e., Natixis Oakmark and Aam Select go up and down completely randomly.

Pair Corralation between Natixis Oakmark and Aam Select

Assuming the 90 days horizon Natixis Oakmark International is expected to generate 3.44 times more return on investment than Aam Select. However, Natixis Oakmark is 3.44 times more volatile than Aam Select Income. It trades about 0.18 of its potential returns per unit of risk. Aam Select Income is currently generating about 0.11 per unit of risk. If you would invest  1,346  in Natixis Oakmark International on December 26, 2024 and sell it today you would earn a total of  158.00  from holding Natixis Oakmark International or generate 11.74% return on investment over 90 days.

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

Natixis Oakmark International  vs.  Aam Select Income

Natixis Oakmark Inte

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Oakmark International are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Natixis Oakmark may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aam Select Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aam Select Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Aam Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Natixis Oakmark and Aam Select

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

The idea behind Natixis Oakmark International and Aam Select Income 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.