Correlation Between Natixis Sustainable and Retirement Living
Can any of the company-specific risk be diversified away by investing in both Natixis Sustainable and Retirement Living 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 Sustainable and Retirement Living into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natixis Sustainable Future and Retirement Living Through, you can compare the effects of market volatilities on Natixis Sustainable and Retirement Living 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 Sustainable with a short position of Retirement Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natixis Sustainable and Retirement Living.
Diversification Opportunities for Natixis Sustainable and Retirement Living
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Natixis and Retirement is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Natixis Sustainable Future and Retirement Living Through in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retirement Living Through and Natixis Sustainable 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 Sustainable Future are associated (or correlated) with Retirement Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retirement Living Through has no effect on the direction of Natixis Sustainable i.e., Natixis Sustainable and Retirement Living go up and down completely randomly.
Pair Corralation between Natixis Sustainable and Retirement Living
Assuming the 90 days horizon Natixis Sustainable is expected to generate 1.1 times less return on investment than Retirement Living. In addition to that, Natixis Sustainable is 1.16 times more volatile than Retirement Living Through. It trades about 0.09 of its total potential returns per unit of risk. Retirement Living Through is currently generating about 0.12 per unit of volatility. If you would invest 989.00 in Retirement Living Through on November 3, 2024 and sell it today you would earn a total of 99.00 from holding Retirement Living Through or generate 10.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natixis Sustainable Future vs. Retirement Living Through
Performance |
| Timeline |
| Natixis Sustainable |
| Retirement Living Through |
Natixis Sustainable and Retirement Living Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natixis Sustainable and Retirement Living
The main advantage of trading using opposite Natixis Sustainable and Retirement Living positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natixis Sustainable position performs unexpectedly, Retirement Living 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 Retirement Living will offset losses from the drop in Retirement Living's long position.The idea behind Natixis Sustainable Future and Retirement Living Through pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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