Correlation Between Gmo High and Natixis Oakmark
Can any of the company-specific risk be diversified away by investing in both Gmo High 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 Gmo High and Natixis Oakmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Natixis Oakmark, you can compare the effects of market volatilities on Gmo High 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 Gmo High with a short position of Natixis Oakmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Natixis Oakmark.
Diversification Opportunities for Gmo High and Natixis Oakmark
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Natixis is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Natixis Oakmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Oakmark and Gmo High 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 Gmo High Yield 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 Gmo High i.e., Gmo High and Natixis Oakmark go up and down completely randomly.
Pair Corralation between Gmo High and Natixis Oakmark
Assuming the 90 days horizon Gmo High is expected to generate 1.75 times less return on investment than Natixis Oakmark. But when comparing it to its historical volatility, Gmo High Yield is 3.47 times less risky than Natixis Oakmark. It trades about 0.13 of its potential returns per unit of risk. Natixis Oakmark is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,593 in Natixis Oakmark on September 12, 2024 and sell it today you would earn a total of 947.00 from holding Natixis Oakmark or generate 36.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.62% |
| Values | Daily Returns |
Gmo High Yield vs. Natixis Oakmark
Performance |
| Timeline |
| Gmo High Yield |
| Natixis Oakmark |
Gmo High and Natixis Oakmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Natixis Oakmark
The main advantage of trading using opposite Gmo High and Natixis Oakmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High 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.| Gmo High vs. Artisan High Income | Gmo High vs. Blackrock High Yield | Gmo High vs. Pax High Yield | Gmo High vs. Msift High Yield |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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