Correlation Between Natixis Sustainable and Siit Large

Can any of the company-specific risk be diversified away by investing in both Natixis Sustainable and Siit Large 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 Siit Large 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 Siit Large Cap, you can compare the effects of market volatilities on Natixis Sustainable and Siit Large 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 Siit Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natixis Sustainable and Siit Large.

Diversification Opportunities for Natixis Sustainable and Siit Large

0.85

Correlation Coefficient

Natixis Sustainable  Siit Large

Very poor diversification

The 3 months correlation between Natixis and SIIT is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Natixis Sustainable Future and Siit Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Large Cap 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 Siit Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Large Cap has no effect on the direction of Natixis Sustainable i.e., Natixis Sustainable and Siit Large go up and down completely randomly.

Pair Corralation between Natixis Sustainable and Siit Large

Assuming the 90 days horizon Natixis Sustainable is expected to generate 1.92 times less return on investment than Siit Large. But when comparing it to its historical volatility, Natixis Sustainable Future is 1.87 times less risky than Siit Large. It trades about 0.38 of its potential returns per unit of risk. Siit Large Cap is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  1,234  in Siit Large Cap on September 3, 2024 and sell it today you would earn a total of  72.00  from holding Siit Large Cap or generate 5.83% return on investment over 90 days.

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

Natixis Sustainable Future  vs.  Siit Large Cap

Natixis Sustainable

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Sustainable Future are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Natixis Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Siit Large Cap

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Large Cap are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Siit Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Natixis Sustainable and Siit Large

The main advantage of trading using opposite Natixis Sustainable and Siit Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natixis Sustainable position performs unexpectedly, Siit Large 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 Siit Large will offset losses from the drop in Siit Large's long position.

The idea behind Natixis Sustainable Future and Siit Large Cap 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.