Correlation Between California Bond and Natixis Oakmark
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and Natixis Oakmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Natixis Oakmark International, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of Natixis Oakmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Natixis Oakmark.
Diversification Opportunities for California Bond and Natixis Oakmark
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between California and Natixis is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund 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 California Bond 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 California Bond Fund 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 California Bond i.e., California Bond and Natixis Oakmark go up and down completely randomly.
Pair Corralation between California Bond and Natixis Oakmark
Assuming the 90 days horizon California Bond Fund is expected to generate 0.3 times more return on investment than Natixis Oakmark. However, California Bond Fund is 3.39 times less risky than Natixis Oakmark. It trades about 0.27 of its potential returns per unit of risk. Natixis Oakmark International is currently generating about -0.19 per unit of risk. If you would invest 1,030 in California Bond Fund on August 30, 2024 and sell it today you would earn a total of 21.00 from holding California Bond Fund or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Natixis Oakmark International
Performance |
| Timeline |
| California Bond |
| Natixis Oakmark Inte |
California Bond and Natixis Oakmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Natixis Oakmark
The main advantage of trading using opposite California Bond and Natixis Oakmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. HUMANA INC | California Bond vs. Aquagold International | California Bond vs. Barloworld Ltd ADR | California Bond vs. Morningstar Unconstrained Allocation |
| Natixis Oakmark vs. HUMANA INC | Natixis Oakmark vs. Aquagold International | Natixis Oakmark vs. Barloworld Ltd ADR | Natixis Oakmark vs. Morningstar Unconstrained Allocation |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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