Correlation Between Astor Longshort and Natixis Sustainable

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

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

Diversification Opportunities for Astor Longshort and Natixis Sustainable

0.97

Correlation Coefficient

Astor Longshort  Natixis Sustainable

Almost no diversification

The 3 months correlation between Astor and Natixis is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort 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 Astor Longshort 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 Astor Longshort 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 Astor Longshort i.e., Astor Longshort and Natixis Sustainable go up and down completely randomly.

Pair Corralation between Astor Longshort and Natixis Sustainable

Assuming the 90 days horizon Astor Longshort is expected to generate 1.21 times less return on investment than Natixis Sustainable. But when comparing it to its historical volatility, Astor Longshort Fund is 1.71 times less risky than Natixis Sustainable. It trades about 0.2 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  1,324  in Natixis Sustainable Future on September 14, 2024 and sell it today you would earn a total of  66.00  from holding Natixis Sustainable Future or generate 4.98% return on investment over 90 days.

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

Astor Longshort Fund  vs.  Natixis Sustainable Future

Astor Longshort

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Astor Longshort Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Astor Longshort 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

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Natixis Sustainable Future are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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 Astor Longshort and Natixis Sustainable

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

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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.