Correlation Between Loomis Sayles and T Rowe

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

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

Diversification Opportunities for Loomis Sayles and T Rowe

0.52

Correlation Coefficient

Loomis Sayles  T Rowe

Very weak diversification

The 3 months correlation between Loomis and RPMGX is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Smallmid and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 Smallmid are associated (or correlated) with T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and T Rowe go up and down completely randomly.

Pair Corralation between Loomis Sayles and T Rowe

Assuming the 90 days horizon Loomis Sayles Smallmid is expected to generate 1.07 times more return on investment than T Rowe. However, Loomis Sayles is 1.07 times more volatile than T Rowe Price. It trades about 0.22 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.11 per unit of risk. If you would invest  1,378  in Loomis Sayles Smallmid on October 22, 2024 and sell it today you would earn a total of  44.00  from holding Loomis Sayles Smallmid or generate 3.19% return on investment over 90 days.

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

Loomis Sayles Smallmid  vs.  T Rowe Price

Loomis Sayles Smallmid

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Smallmid are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Loomis Sayles is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

T Rowe Price

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days T Rowe Price has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Loomis Sayles and T Rowe

The main advantage of trading using opposite Loomis Sayles and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.

The idea behind Loomis Sayles Smallmid and T Rowe Price 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 Anywhere module to track or share privately all of your investments from the convenience of any device.