Correlation Between Natixis Oakmark and Pimco Diversified

Can any of the company-specific risk be diversified away by investing in both Natixis Oakmark and Pimco Diversified 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 Pimco Diversified 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 Pimco Diversified Income, you can compare the effects of market volatilities on Natixis Oakmark and Pimco Diversified 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 Pimco Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natixis Oakmark and Pimco Diversified.

Diversification Opportunities for Natixis Oakmark and Pimco Diversified

0.89

Correlation Coefficient

Natixis Oakmark  Pimco Diversified

Very poor diversification

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

Pair Corralation between Natixis Oakmark and Pimco Diversified

Assuming the 90 days horizon Natixis Oakmark International is expected to generate 4.63 times more return on investment than Pimco Diversified. However, Natixis Oakmark is 4.63 times more volatile than Pimco Diversified Income. It trades about 0.2 of its potential returns per unit of risk. Pimco Diversified Income is currently generating about 0.2 per unit of risk. If you would invest  1,346  in Natixis Oakmark International on December 21, 2024 and sell it today you would earn a total of  176.00  from holding Natixis Oakmark International or generate 13.08% 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.  Pimco Diversified Income

Natixis Oakmark Inte

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Oakmark International are ranked lower than 15 (%) 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.

Pimco Diversified Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Diversified Income are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Pimco Diversified 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 Pimco Diversified

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

The idea behind Natixis Oakmark International and Pimco Diversified 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.