Correlation Between Salesforce and Natixis Oakmark

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

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

Diversification Opportunities for Salesforce and Natixis Oakmark

0.78

Correlation Coefficient

Salesforce  Natixis Oakmark

Poor diversification

The 3 months correlation between Salesforce and Natixis is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Natixis Oakmark Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Oakmark and Salesforce 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 Salesforce 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 Salesforce i.e., Salesforce and Natixis Oakmark go up and down completely randomly.

Pair Corralation between Salesforce and Natixis Oakmark

Considering the 90-day investment horizon Salesforce is expected to generate 1.78 times more return on investment than Natixis Oakmark. However, Salesforce is 1.78 times more volatile than Natixis Oakmark Fund. It trades about 0.06 of its potential returns per unit of risk. Natixis Oakmark Fund is currently generating about 0.07 per unit of risk. If you would invest  17,124  in Salesforce on January 19, 2024 and sell it today you would earn a total of  10,508  from holding Salesforce or generate 61.36% return on investment over 90 days.

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

Salesforce  vs.  Natixis Oakmark Fund

Salesforce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Salesforce is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Natixis Oakmark

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Oakmark Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Natixis Oakmark is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and Natixis Oakmark

The main advantage of trading using opposite Salesforce and Natixis Oakmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce 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 Salesforce and Natixis Oakmark Fund 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.