Correlation Between Loomis Sayles and Queens Road

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

Diversification Opportunities for Loomis Sayles and Queens Road

-0.22

Correlation Coefficient

Loomis Sayles  Queens Road

Very good diversification

The 3 months correlation between Loomis and Queens is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Investment and Queens Road Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Small 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 Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Small has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Queens Road go up and down completely randomly.

Pair Corralation between Loomis Sayles and Queens Road

Assuming the 90 days horizon Loomis Sayles Investment is expected to generate 0.32 times more return on investment than Queens Road. However, Loomis Sayles Investment is 3.11 times less risky than Queens Road. It trades about 0.1 of its potential returns per unit of risk. Queens Road Small is currently generating about -0.01 per unit of risk. If you would invest  965.00  in Loomis Sayles Investment on December 29, 2024 and sell it today you would earn a total of  16.00  from holding Loomis Sayles Investment or generate 1.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Loomis Sayles Investment  vs.  Queens Road Small

Loomis Sayles Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Investment are ranked lower than 7 (%) 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.

Queens Road Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Queens Road Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Queens Road 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 Queens Road

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

The idea behind Loomis Sayles Investment and Queens Road Small 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.