Correlation Between Gateway Equity and Natixis Sustainable
Can any of the company-specific risk be diversified away by investing in both Gateway Equity 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 Gateway Equity and Natixis Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gateway Equity Call and Natixis Sustainable Future, you can compare the effects of market volatilities on Gateway Equity 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 Gateway Equity with a short position of Natixis Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gateway Equity and Natixis Sustainable.
Diversification Opportunities for Gateway Equity and Natixis Sustainable
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gateway and Natixis is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Equity Call and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable and Gateway Equity 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 Gateway Equity Call 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 Gateway Equity i.e., Gateway Equity and Natixis Sustainable go up and down completely randomly.
Pair Corralation between Gateway Equity and Natixis Sustainable
Assuming the 90 days horizon Gateway Equity is expected to generate 1.2 times less return on investment than Natixis Sustainable. But when comparing it to its historical volatility, Gateway Equity Call is 1.34 times less risky than Natixis Sustainable. It trades about 0.39 of its potential returns per unit of risk. Natixis Sustainable Future is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,116 in Natixis Sustainable Future on September 3, 2024 and sell it today you would earn a total of 49.00 from holding Natixis Sustainable Future or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gateway Equity Call vs. Natixis Sustainable Future
Performance |
| Timeline |
| Gateway Equity Call |
| Natixis Sustainable |
Gateway Equity and Natixis Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gateway Equity and Natixis Sustainable
The main advantage of trading using opposite Gateway Equity and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gateway Equity 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.| Gateway Equity vs. Qs Growth Fund | Gateway Equity vs. Small Pany Growth | Gateway Equity vs. Artisan Small Cap | Gateway Equity vs. Mid Cap Growth |
| Natixis Sustainable vs. Vanguard Target Retirement | Natixis Sustainable vs. American Funds 2065 | Natixis Sustainable vs. American Funds 2065 | Natixis Sustainable vs. American Funds 2065 |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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