Correlation Between Innovator and Natixis ETF
Can any of the company-specific risk be diversified away by investing in both Innovator and Natixis ETF 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 Innovator and Natixis ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator SP 500 and Natixis ETF Trust, you can compare the effects of market volatilities on Innovator and Natixis ETF 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 Innovator with a short position of Natixis ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator and Natixis ETF.
Diversification Opportunities for Innovator and Natixis ETF
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Innovator and Natixis is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Innovator SP 500 and Natixis ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis ETF Trust and Innovator 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 Innovator SP 500 are associated (or correlated) with Natixis ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natixis ETF Trust has no effect on the direction of Innovator i.e., Innovator and Natixis ETF go up and down completely randomly.
Pair Corralation between Innovator and Natixis ETF
Given the investment horizon of 90 days Innovator is expected to generate 1.97 times less return on investment than Natixis ETF. But when comparing it to its historical volatility, Innovator SP 500 is 2.97 times less risky than Natixis ETF. It trades about 0.13 of its potential returns per unit of risk. Natixis ETF Trust is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,369 in Natixis ETF Trust on August 26, 2024 and sell it today you would earn a total of 115.00 from holding Natixis ETF Trust or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator SP 500 vs. Natixis ETF Trust
Performance |
| Timeline |
| Innovator SP 500 |
| Natixis ETF Trust |
Innovator and Natixis ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator and Natixis ETF
The main advantage of trading using opposite Innovator and Natixis ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator position performs unexpectedly, Natixis ETF 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 ETF will offset losses from the drop in Natixis ETF's long position.The idea behind Innovator SP 500 and Natixis ETF Trust 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.| Natixis ETF vs. Morningstar Unconstrained Allocation | Natixis ETF vs. High Yield Municipal Fund | Natixis ETF vs. Via Renewables | Natixis ETF vs. Knife River |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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