Correlation Between Loomis Sayles and L Abbett

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

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

Diversification Opportunities for Loomis Sayles and L Abbett

0.3

Correlation Coefficient

Loomis Sayles  L Abbett

Weak diversification

The 3 months correlation between Loomis and LAVVX is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Small and L Abbett Fundamental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett Fundamental 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 Small are associated (or correlated) with L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Fundamental has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and L Abbett go up and down completely randomly.

Pair Corralation between Loomis Sayles and L Abbett

Assuming the 90 days horizon Loomis Sayles Small is expected to under-perform the L Abbett. In addition to that, Loomis Sayles is 2.21 times more volatile than L Abbett Fundamental. It trades about -0.13 of its total potential returns per unit of risk. L Abbett Fundamental is currently generating about 0.03 per unit of volatility. If you would invest  1,536  in L Abbett Fundamental on December 20, 2024 and sell it today you would earn a total of  17.00  from holding L Abbett Fundamental or generate 1.11% return on investment over 90 days.

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

Loomis Sayles Small  vs.  L Abbett Fundamental

Loomis Sayles Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Loomis Sayles Small 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 basic 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.

L Abbett Fundamental

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in L Abbett Fundamental are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, L Abbett 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 L Abbett

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

The idea behind Loomis Sayles Small and L Abbett Fundamental 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.