Correlation Between Pace High and Natixis Sustainable

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

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

Diversification Opportunities for Pace High and Natixis Sustainable

0.25

Correlation Coefficient

Pace High  Natixis Sustainable

Modest diversification

The 3 months correlation between Pace and Natixis is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pace High Yield and Natixis Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natixis Sustainable and Pace High 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 Pace High Yield 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 Pace High i.e., Pace High and Natixis Sustainable go up and down completely randomly.

Pair Corralation between Pace High and Natixis Sustainable

Assuming the 90 days horizon Pace High Yield is expected to generate 0.18 times more return on investment than Natixis Sustainable. However, Pace High Yield is 5.63 times less risky than Natixis Sustainable. It trades about 0.17 of its potential returns per unit of risk. Natixis Sustainable Future is currently generating about 0.02 per unit of risk. If you would invest  877.00  in Pace High Yield on December 28, 2024 and sell it today you would earn a total of  14.00  from holding Pace High Yield or generate 1.6% return on investment over 90 days.

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

Pace High Yield  vs.  Natixis Sustainable Future

Pace High Yield

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pace High Yield are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pace High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Natixis Sustainable

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Sustainable Future are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, 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 Pace High and Natixis Sustainable

The main advantage of trading using opposite Pace High and Natixis Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace High 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 Pace High Yield 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 CEOs Directory module to screen CEOs from public companies around the world.