Correlation Between Vanguard International and Natixis Oakmark

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

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

Diversification Opportunities for Vanguard International and Natixis Oakmark

0.81

Correlation Coefficient

Vanguard International  Natixis Oakmark

Very poor diversification

The 3 months correlation between Vanguard and Natixis is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard International Value 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 Vanguard International 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 Vanguard International Value 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 Vanguard International i.e., Vanguard International and Natixis Oakmark go up and down completely randomly.

Pair Corralation between Vanguard International and Natixis Oakmark

Assuming the 90 days horizon Vanguard International Value is expected to generate 0.92 times more return on investment than Natixis Oakmark. However, Vanguard International Value is 1.09 times less risky than Natixis Oakmark. It trades about 0.0 of its potential returns per unit of risk. Natixis Oakmark International is currently generating about -0.01 per unit of risk. If you would invest  3,795  in Vanguard International Value on October 5, 2024 and sell it today you would lose (38.00) from holding Vanguard International Value or give up 1.0% of portfolio value over 90 days.

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

Vanguard International Value  vs.  Natixis Oakmark International

Vanguard International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard International Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Natixis Oakmark Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Natixis Oakmark International 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.

Pair Trading with Vanguard International and Natixis Oakmark

The main advantage of trading using opposite Vanguard International and Natixis Oakmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard International 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 Vanguard International Value 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.