Correlation Between Loomis Sayles and Locorr Dynamic

Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Locorr Dynamic 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 Locorr Dynamic 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 Locorr Dynamic Equity, you can compare the effects of market volatilities on Loomis Sayles and Locorr Dynamic 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 Locorr Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Locorr Dynamic.

Diversification Opportunities for Loomis Sayles and Locorr Dynamic

0.24

Correlation Coefficient

Loomis Sayles  Locorr Dynamic

Modest diversification

The 3 months correlation between Loomis and Locorr is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Investment and Locorr Dynamic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Dynamic Equity 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 Locorr Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Dynamic Equity has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Locorr Dynamic go up and down completely randomly.

Pair Corralation between Loomis Sayles and Locorr Dynamic

Assuming the 90 days horizon Loomis Sayles Investment is expected to generate 0.55 times more return on investment than Locorr Dynamic. However, Loomis Sayles Investment is 1.81 times less risky than Locorr Dynamic. It trades about 0.05 of its potential returns per unit of risk. Locorr Dynamic Equity is currently generating about -0.09 per unit of risk. If you would invest  981.00  in Loomis Sayles Investment on December 3, 2024 and sell it today you would earn a total of  8.00  from holding Loomis Sayles Investment or generate 0.82% return on investment over 90 days.

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

Loomis Sayles Investment  vs.  Locorr Dynamic Equity

Loomis Sayles Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Investment are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.

Locorr Dynamic Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Locorr Dynamic Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Locorr Dynamic 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 Locorr Dynamic

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

The idea behind Loomis Sayles Investment and Locorr Dynamic Equity 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.