Correlation Between Federated Short-intermedia and Natixis Oakmark
Can any of the company-specific risk be diversified away by investing in both Federated Short-intermedia 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 Federated Short-intermedia and Natixis Oakmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Short Intermediate Duration and Natixis Oakmark, you can compare the effects of market volatilities on Federated Short-intermedia 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 Federated Short-intermedia with a short position of Natixis Oakmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Short-intermedia and Natixis Oakmark.
Diversification Opportunities for Federated Short-intermedia and Natixis Oakmark
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federated and Natixis is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Federated Short Intermediate D and Natixis Oakmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Oakmark and Federated Short-intermedia 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 Federated Short Intermediate Duration 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 has no effect on the direction of Federated Short-intermedia i.e., Federated Short-intermedia and Natixis Oakmark go up and down completely randomly.
Pair Corralation between Federated Short-intermedia and Natixis Oakmark
Assuming the 90 days horizon Federated Short-intermedia is expected to generate 14.03 times less return on investment than Natixis Oakmark. But when comparing it to its historical volatility, Federated Short Intermediate Duration is 7.35 times less risky than Natixis Oakmark. It trades about 0.16 of its potential returns per unit of risk. Natixis Oakmark is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,384 in Natixis Oakmark on September 1, 2024 and sell it today you would earn a total of 242.00 from holding Natixis Oakmark or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Short Intermediate D vs. Natixis Oakmark
Performance |
| Timeline |
| Federated Short-intermedia |
| Natixis Oakmark |
Federated Short-intermedia and Natixis Oakmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Short-intermedia and Natixis Oakmark
The main advantage of trading using opposite Federated Short-intermedia and Natixis Oakmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Short-intermedia 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 Federated Short Intermediate Duration and Natixis Oakmark 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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Check out your portfolio center.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.
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