Correlation Between Federated Global and Natixis Sustainable
Can any of the company-specific risk be diversified away by investing in both Federated 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 Federated 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 Federated Global Allocation and Natixis Sustainable Future, you can compare the effects of market volatilities on Federated 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 Federated Global with a short position of Natixis Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Natixis Sustainable.
Diversification Opportunities for Federated Global and Natixis Sustainable
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FEDERATED and Natixis is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable and Federated 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 Federated Global Allocation 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 Federated Global i.e., Federated Global and Natixis Sustainable go up and down completely randomly.
Pair Corralation between Federated Global and Natixis Sustainable
Assuming the 90 days horizon Federated Global is expected to generate 1.32 times less return on investment than Natixis Sustainable. But when comparing it to its historical volatility, Federated Global Allocation is 1.34 times less risky than Natixis Sustainable. It trades about 0.09 of its potential returns per unit of risk. Natixis Sustainable Future is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,108 in Natixis Sustainable Future on August 31, 2024 and sell it today you would earn a total of 273.00 from holding Natixis Sustainable Future or generate 24.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Federated Global Allocation vs. Natixis Sustainable Future
Performance |
| Timeline |
| Federated Global All |
| Natixis Sustainable |
Federated Global and Natixis Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Natixis Sustainable
The main advantage of trading using opposite Federated Global and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated 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.| Federated Global vs. Federated Max Cap Index | Federated Global vs. Federated Kaufmann Fund | Federated Global vs. Federated Strategic Income | Federated Global vs. Federated Bond Fund |
| Natixis Sustainable vs. Federated Global Allocation | Natixis Sustainable vs. Commonwealth Global Fund | Natixis Sustainable vs. Dreyfusstandish Global Fixed | Natixis Sustainable vs. Barings Global Floating |
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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