Correlation Between Tesla and Natixis Oakmark

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

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

Diversification Opportunities for Tesla and Natixis Oakmark

-0.63

Correlation Coefficient

Tesla  Natixis Oakmark

Excellent diversification

The 3 months correlation between Tesla and Natixis is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc and Natixis Oakmark Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Oakmark and Tesla 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 Tesla Inc 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 Tesla i.e., Tesla and Natixis Oakmark go up and down completely randomly.

Pair Corralation between Tesla and Natixis Oakmark

Given the investment horizon of 90 days Tesla Inc is expected to under-perform the Natixis Oakmark. In addition to that, Tesla is 4.95 times more volatile than Natixis Oakmark Fund. It trades about -0.06 of its total potential returns per unit of risk. Natixis Oakmark Fund is currently generating about -0.04 per unit of volatility. If you would invest  3,187  in Natixis Oakmark Fund on January 25, 2024 and sell it today you would lose (26.00) from holding Natixis Oakmark Fund or give up 0.82% of portfolio value over 90 days.

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

Tesla Inc  vs.  Natixis Oakmark Fund

Tesla Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tesla Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Natixis Oakmark

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Oakmark Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Natixis Oakmark may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Tesla and Natixis Oakmark

The main advantage of trading using opposite Tesla and Natixis Oakmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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 Tesla Inc 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.