Correlation Between Loomis Sayles and Fidelity Puritan

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

By analyzing existing cross correlation between Loomis Sayles Inflation and Fidelity Puritan Fund, you can compare the effects of market volatilities on Loomis Sayles and Fidelity Puritan 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 Fidelity Puritan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Fidelity Puritan.

Diversification Opportunities for Loomis Sayles and Fidelity Puritan

-0.5

Correlation Coefficient

Loomis Sayles  Fidelity Puritan

Very good diversification

The 3 months correlation between Loomis and Fidelity is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Inflation and Fidelity Puritan Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Puritan 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 Inflation are associated (or correlated) with Fidelity Puritan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Puritan has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Fidelity Puritan go up and down completely randomly.

Pair Corralation between Loomis Sayles and Fidelity Puritan

Assuming the 90 days horizon Loomis Sayles Inflation is expected to under-perform the Fidelity Puritan. But the mutual fund apears to be less risky and, when comparing its historical volatility, Loomis Sayles Inflation is 1.77 times less risky than Fidelity Puritan. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Fidelity Puritan Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,486  in Fidelity Puritan Fund on September 19, 2024 and sell it today you would earn a total of  116.00  from holding Fidelity Puritan Fund or generate 4.67% return on investment over 90 days.

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

Loomis Sayles Inflation  vs.  Fidelity Puritan Fund

Loomis Sayles Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loomis Sayles Inflation 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.

Fidelity Puritan

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Puritan Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Fidelity Puritan 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 Fidelity Puritan

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

The idea behind Loomis Sayles Inflation and Fidelity Puritan 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.