Correlation Between Loomis Sayles and Victory Diversified

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

Diversification Opportunities for Loomis Sayles and Victory Diversified

0.17

Correlation Coefficient

Loomis Sayles  Victory Diversified

Average diversification

The 3 months correlation between Loomis and Victory is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Inflation and Victory Diversified Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Diversified Stock 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 Victory Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Diversified Stock has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Victory Diversified go up and down completely randomly.

Pair Corralation between Loomis Sayles and Victory Diversified

Assuming the 90 days horizon Loomis Sayles Inflation is expected to generate 0.3 times more return on investment than Victory Diversified. However, Loomis Sayles Inflation is 3.29 times less risky than Victory Diversified. It trades about 0.31 of its potential returns per unit of risk. Victory Diversified Stock is currently generating about -0.29 per unit of risk. If you would invest  960.00  in Loomis Sayles Inflation on December 5, 2024 and sell it today you would earn a total of  17.00  from holding Loomis Sayles Inflation or generate 1.77% return on investment over 90 days.

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

Loomis Sayles Inflation  vs.  Victory Diversified Stock

Loomis Sayles Inflation

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Inflation are ranked lower than 6 (%) 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.

Victory Diversified Stock

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Diversified Stock has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Loomis Sayles and Victory Diversified

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

The idea behind Loomis Sayles Inflation and Victory Diversified Stock 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 .