Correlation Between California Bond and Natixis Sustainable
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and Natixis Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Natixis Sustainable Future, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of Natixis Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Natixis Sustainable.
Diversification Opportunities for California Bond and Natixis Sustainable
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between California and Natixis is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable and California Bond 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 California Bond Fund 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 California Bond i.e., California Bond and Natixis Sustainable go up and down completely randomly.
Pair Corralation between California Bond and Natixis Sustainable
Assuming the 90 days horizon California Bond is expected to generate 2.5 times less return on investment than Natixis Sustainable. But when comparing it to its historical volatility, California Bond Fund is 1.8 times less risky than Natixis Sustainable. It trades about 0.1 of its potential returns per unit of risk. Natixis Sustainable Future is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 894.00 in Natixis Sustainable Future on September 3, 2024 and sell it today you would earn a total of 74.00 from holding Natixis Sustainable Future or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Natixis Sustainable Future
Performance |
| Timeline |
| California Bond |
| Natixis Sustainable |
California Bond and Natixis Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Natixis Sustainable
The main advantage of trading using opposite California Bond and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free | California Bond vs. Franklin California Tax Free |
| Natixis Sustainable vs. Versatile Bond Portfolio | Natixis Sustainable vs. T Rowe Price | Natixis Sustainable vs. Limited Term Tax | Natixis Sustainable vs. California Bond Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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