Report
"Automation" of share purchases: Is there a decorrelation from the fundamentals?
Share purchases/sales are increasingly "automated": they are carried out in the context of passive management (ETFs in particular), or algorithmic trading (high-frequency, HFT). The risk with these "automated" share purchases/sales (which are not linked to an analysis of the fundamental value of each company) is that they may decorrelate share prices from their fundamental value. We can actually see the sign of this decorrelation, which is the instability of equity risk premia.
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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