Correlation Between Columbia Global and Natixis Sustainable

Can any of the company-specific risk be diversified away by investing in both Columbia Global 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 Columbia Global and Natixis Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Columbia Global Technology and Natixis Sustainable Future, you can compare the effects of market volatilities on Columbia Global 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 Columbia Global with a short position of Natixis Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Global and Natixis Sustainable.

Diversification Opportunities for Columbia Global and Natixis Sustainable

0.67

Correlation Coefficient

Columbia Global  Natixis Sustainable

Poor diversification

The 3 months correlation between Columbia and Natixis is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Global Technology and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable and Columbia Global 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 Columbia Global Technology 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 Columbia Global i.e., Columbia Global and Natixis Sustainable go up and down completely randomly.

Pair Corralation between Columbia Global and Natixis Sustainable

Assuming the 90 days horizon Columbia Global Technology is expected to under-perform the Natixis Sustainable. In addition to that, Columbia Global is 2.19 times more volatile than Natixis Sustainable Future. It trades about -0.12 of its total potential returns per unit of risk. Natixis Sustainable Future is currently generating about -0.01 per unit of volatility. If you would invest  1,280  in Natixis Sustainable Future on December 30, 2024 and sell it today you would lose (11.00) from holding Natixis Sustainable Future or give up 0.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Columbia Global Technology  vs.  Natixis Sustainable Future

Columbia Global Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Columbia Global Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Natixis Sustainable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natixis Sustainable Future has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Natixis Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Columbia Global and Natixis Sustainable

The main advantage of trading using opposite Columbia Global and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Global 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.

The idea behind Columbia Global Technology and Natixis Sustainable Future 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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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.