Correlation Between IShares MSCI and Natixis Sustainable
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and Natixis Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI USA and Natixis Sustainable Future, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of Natixis Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Natixis Sustainable.
Diversification Opportunities for IShares MSCI and Natixis Sustainable
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Natixis is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable and IShares MSCI 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 MSCI USA 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 IShares MSCI i.e., IShares MSCI and Natixis Sustainable go up and down completely randomly.
Pair Corralation between IShares MSCI and Natixis Sustainable
Given the investment horizon of 90 days iShares MSCI USA is expected to generate 1.71 times more return on investment than Natixis Sustainable. However, IShares MSCI is 1.71 times more volatile than Natixis Sustainable Future. It trades about 0.42 of its potential returns per unit of risk. Natixis Sustainable Future is currently generating about 0.4 per unit of risk. If you would invest 11,800 in iShares MSCI USA on September 1, 2024 and sell it today you would earn a total of 760.00 from holding iShares MSCI USA or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares MSCI USA vs. Natixis Sustainable Future
Performance |
| Timeline |
| iShares MSCI USA |
| Natixis Sustainable |
IShares MSCI and Natixis Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Natixis Sustainable
The main advantage of trading using opposite IShares MSCI and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.| IShares MSCI vs. iShares MSCI KLD | IShares MSCI vs. iShares ESG Aware | IShares MSCI vs. iShares MSCI ACWI | IShares MSCI vs. SPDR SSGA Gender |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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