Correlation Between Loomis Sayles and Short Real

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

Diversification Opportunities for Loomis Sayles and Short Real

-0.58

Correlation Coefficient

Loomis Sayles  Short Real

Excellent diversification

The 3 months correlation between Loomis and Short is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Inflation and Short Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Real Estate 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 Short Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Real Estate has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Short Real go up and down completely randomly.

Pair Corralation between Loomis Sayles and Short Real

Assuming the 90 days horizon Loomis Sayles Inflation is expected to under-perform the Short Real. But the mutual fund apears to be less risky and, when comparing its historical volatility, Loomis Sayles Inflation is 3.94 times less risky than Short Real. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Short Real Estate is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  793.00  in Short Real Estate on September 22, 2024 and sell it today you would earn a total of  76.00  from holding Short Real Estate or generate 9.58% 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.  Short Real Estate

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.

Short Real Estate

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Short Real Estate are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Short Real showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Loomis Sayles and Short Real

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

The idea behind Loomis Sayles Inflation and Short Real Estate 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.