Correlation Between Natixis Investment and American Century
Can any of the company-specific risk be diversified away by investing in both Natixis Investment and American Century 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 Natixis Investment and American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natixis Investment Managers and American Century STOXX, you can compare the effects of market volatilities on Natixis Investment and American Century 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 Natixis Investment with a short position of American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natixis Investment and American Century.
Diversification Opportunities for Natixis Investment and American Century
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Natixis and American is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Natixis Investment Managers and American Century STOXX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century STOXX and Natixis Investment 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 Natixis Investment Managers are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century STOXX has no effect on the direction of Natixis Investment i.e., Natixis Investment and American Century go up and down completely randomly.
Pair Corralation between Natixis Investment and American Century
Given the investment horizon of 90 days Natixis Investment is expected to generate 2.95 times less return on investment than American Century. But when comparing it to its historical volatility, Natixis Investment Managers is 5.42 times less risky than American Century. It trades about 0.17 of its potential returns per unit of risk. American Century STOXX is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,652 in American Century STOXX on August 30, 2024 and sell it today you would earn a total of 1,782 from holding American Century STOXX or generate 38.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.93% |
| Values | Daily Returns |
Natixis Investment Managers vs. American Century STOXX
Performance |
| Timeline |
| Natixis Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| American Century STOXX |
Natixis Investment and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natixis Investment and American Century
The main advantage of trading using opposite Natixis Investment and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natixis Investment position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Natixis Investment vs. VictoryShares USAA Core | Natixis Investment vs. American Century Diversified | Natixis Investment vs. IQ MacKay Municipal | Natixis Investment vs. IQ MacKay Municipal |
| American Century vs. American Century Quality | American Century vs. Invesco SP 500 | American Century vs. American Century Diversified | American Century vs. Invesco SP SmallCap |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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