Correlation Between Loomis Sayles and International Growth

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

Diversification Opportunities for Loomis Sayles and International Growth

0.7

Correlation Coefficient

Loomis Sayles  International Growth

Poor diversification

The 3 months correlation between Loomis and International is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Inflation and International Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth And 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 International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth And has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and International Growth go up and down completely randomly.

Pair Corralation between Loomis Sayles and International Growth

Assuming the 90 days horizon Loomis Sayles Inflation is expected to under-perform the International Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Loomis Sayles Inflation is 2.68 times less risky than International Growth. The mutual fund trades about -0.13 of its potential returns per unit of risk. The International Growth And is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  3,796  in International Growth And on September 15, 2024 and sell it today you would lose (50.00) from holding International Growth And or give up 1.32% of portfolio value over 90 days.

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

Loomis Sayles Inflation  vs.  International Growth And

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.

International Growth And

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Growth And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, International Growth 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 International Growth

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

The idea behind Loomis Sayles Inflation and International Growth And 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .