Correlation Between IShares ESG and Natixis ETF
Can any of the company-specific risk be diversified away by investing in both IShares ESG and Natixis ETF 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 IShares ESG and Natixis ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares ESG Aware and Natixis ETF Trust, you can compare the effects of market volatilities on IShares ESG and Natixis ETF 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 IShares ESG with a short position of Natixis ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares ESG and Natixis ETF.
Diversification Opportunities for IShares ESG and Natixis ETF
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and Natixis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding iShares ESG Aware and Natixis ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis ETF Trust and IShares ESG 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 iShares ESG Aware are associated (or correlated) with Natixis ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis ETF Trust has no effect on the direction of IShares ESG i.e., IShares ESG and Natixis ETF go up and down completely randomly.
Pair Corralation between IShares ESG and Natixis ETF
Given the investment horizon of 90 days IShares ESG is expected to generate 1.12 times less return on investment than Natixis ETF. But when comparing it to its historical volatility, iShares ESG Aware is 1.48 times less risky than Natixis ETF. It trades about 0.2 of its potential returns per unit of risk. Natixis ETF Trust is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 3,401 in Natixis ETF Trust on November 2, 2024 and sell it today you would earn a total of 127.00 from holding Natixis ETF Trust or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares ESG Aware vs. Natixis ETF Trust
Performance |
| Timeline |
| iShares ESG Aware |
| Natixis ETF Trust |
IShares ESG and Natixis ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares ESG and Natixis ETF
The main advantage of trading using opposite IShares ESG and Natixis ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares ESG position performs unexpectedly, Natixis ETF 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 ETF will offset losses from the drop in Natixis ETF's long position.| IShares ESG vs. Xtrackers MSCI USA | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares MSCI USA |
| Natixis ETF vs. Simplify Equity PLUS | Natixis ETF vs. Virtus WMC International | Natixis ETF vs. Affinity World Leaders |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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