Correlation Between Small Cap and Natixis Oakmark

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

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

Diversification Opportunities for Small Cap and Natixis Oakmark

-0.66

Correlation Coefficient

Small Cap  Natixis Oakmark

Excellent diversification

The 3 months correlation between Small and Natixis is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock 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 Small Cap 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 Small Cap Stock 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 Small Cap i.e., Small Cap and Natixis Oakmark go up and down completely randomly.

Pair Corralation between Small Cap and Natixis Oakmark

Assuming the 90 days horizon Small Cap Stock is expected to under-perform the Natixis Oakmark. In addition to that, Small Cap is 1.03 times more volatile than Natixis Oakmark International. It trades about -0.13 of its total potential returns per unit of risk. Natixis Oakmark International is currently generating about 0.18 per unit of volatility. If you would invest  1,346  in Natixis Oakmark International on December 22, 2024 and sell it today you would earn a total of  160.00  from holding Natixis Oakmark International or generate 11.89% return on investment over 90 days.

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

Small Cap Stock  vs.  Natixis Oakmark International

Small Cap Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Small Cap Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Inte

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Oakmark International 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 April 2025.

Pair Trading with Small Cap and Natixis Oakmark

The main advantage of trading using opposite Small Cap and Natixis Oakmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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 Small Cap Stock 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.