Correlation Between Barings Global and Natixis Sustainable
Can any of the company-specific risk be diversified away by investing in both Barings Global and Natixis Sustainable 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 Barings Global and Natixis Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Natixis Sustainable Future, you can compare the effects of market volatilities on Barings Global and Natixis Sustainable 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 Barings Global with a short position of Natixis Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Natixis Sustainable.
Diversification Opportunities for Barings Global and Natixis Sustainable
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Natixis is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable and Barings Global 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 Barings Global Floating are associated (or correlated) with Natixis Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis Sustainable has no effect on the direction of Barings Global i.e., Barings Global and Natixis Sustainable go up and down completely randomly.
Pair Corralation between Barings Global and Natixis Sustainable
Assuming the 90 days horizon Barings Global is expected to generate 12.5 times less return on investment than Natixis Sustainable. But when comparing it to its historical volatility, Barings Global Floating is 10.42 times less risky than Natixis Sustainable. It trades about 0.3 of its potential returns per unit of risk. Natixis Sustainable Future is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,339 in Natixis Sustainable Future on September 2, 2024 and sell it today you would earn a total of 58.00 from holding Natixis Sustainable Future or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Natixis Sustainable Future
Performance |
| Timeline |
| Barings Global Floating |
| Natixis Sustainable |
Barings Global and Natixis Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Natixis Sustainable
The main advantage of trading using opposite Barings Global and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Natixis Sustainable 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 Sustainable will offset losses from the drop in Natixis Sustainable's long position.| Barings Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
| Natixis Sustainable vs. Asg Managed Futures | Natixis Sustainable vs. Asg Managed Futures | Natixis Sustainable vs. Natixis Oakmark | Natixis Sustainable vs. Natixis Oakmark International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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