Correlation Between Natixis Oakmark and Vaughan Nelson

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

By analyzing existing cross correlation between Natixis Oakmark and Vaughan Nelson Value, you can compare the effects of market volatilities on Natixis Oakmark and Vaughan Nelson 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 Vaughan Nelson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natixis Oakmark and Vaughan Nelson.

Diversification Opportunities for Natixis Oakmark and Vaughan Nelson

0.97

Correlation Coefficient

Natixis Oakmark  Vaughan Nelson

Almost no diversification

The 3 months correlation between Natixis and Vaughan is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Natixis Oakmark and Vaughan Nelson Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaughan Nelson Value 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 are associated (or correlated) with Vaughan Nelson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaughan Nelson Value has no effect on the direction of Natixis Oakmark i.e., Natixis Oakmark and Vaughan Nelson go up and down completely randomly.

Pair Corralation between Natixis Oakmark and Vaughan Nelson

Assuming the 90 days horizon Natixis Oakmark is expected to generate 1.16 times less return on investment than Vaughan Nelson. In addition to that, Natixis Oakmark is 1.09 times more volatile than Vaughan Nelson Value. It trades about 0.07 of its total potential returns per unit of risk. Vaughan Nelson Value is currently generating about 0.08 per unit of volatility. If you would invest  1,766  in Vaughan Nelson Value on September 12, 2024 and sell it today you would earn a total of  797.00  from holding Vaughan Nelson Value or generate 45.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Natixis Oakmark  vs.  Vaughan Nelson Value

Natixis Oakmark

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Oakmark are ranked lower than 14 (%) 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 January 2025.

Vaughan Nelson Value

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vaughan Nelson Value are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Vaughan Nelson showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Natixis Oakmark and Vaughan Nelson

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

The idea behind Natixis Oakmark and Vaughan Nelson Value 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.