Correlation Between Loomis Sayles and Commodities Strategy

Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Commodities Strategy 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 Loomis Sayles and Commodities Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Loomis Sayles Investment and Commodities Strategy Fund, you can compare the effects of market volatilities on Loomis Sayles and Commodities Strategy 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 Loomis Sayles with a short position of Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Commodities Strategy.

Diversification Opportunities for Loomis Sayles and Commodities Strategy

0.13

Correlation Coefficient

Loomis Sayles  Commodities Strategy

Average diversification

The 3 months correlation between Loomis and Commodities is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Investment and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy and Loomis Sayles 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 Loomis Sayles Investment are associated (or correlated) with Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Commodities Strategy go up and down completely randomly.

Pair Corralation between Loomis Sayles and Commodities Strategy

Assuming the 90 days horizon Loomis Sayles Investment is expected to generate 0.34 times more return on investment than Commodities Strategy. However, Loomis Sayles Investment is 2.96 times less risky than Commodities Strategy. It trades about 0.04 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about 0.01 per unit of risk. If you would invest  901.00  in Loomis Sayles Investment on October 5, 2024 and sell it today you would earn a total of  70.00  from holding Loomis Sayles Investment or generate 7.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Loomis Sayles Investment  vs.  Commodities Strategy Fund

Loomis Sayles Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loomis Sayles Investment has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Loomis Sayles is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Commodities Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commodities Strategy Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Commodities Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Loomis Sayles and Commodities Strategy

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

The idea behind Loomis Sayles Investment and Commodities Strategy Fund 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.