Correlation Between Great-west Loomis and 1290 Funds

Can any of the company-specific risk be diversified away by investing in both Great-west Loomis and 1290 Funds 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 Great-west Loomis and 1290 Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Great West Loomis Sayles and 1290 Funds , you can compare the effects of market volatilities on Great-west Loomis and 1290 Funds 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 Great-west Loomis with a short position of 1290 Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Loomis and 1290 Funds.

Diversification Opportunities for Great-west Loomis and 1290 Funds

0.75

Correlation Coefficient

Great-west Loomis  1290 Funds

Poor diversification

The 3 months correlation between Great-west and 1290 is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Great West Loomis Sayles and 1290 Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Funds and Great-west Loomis 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 Great West Loomis Sayles are associated (or correlated) with 1290 Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Funds has no effect on the direction of Great-west Loomis i.e., Great-west Loomis and 1290 Funds go up and down completely randomly.

Pair Corralation between Great-west Loomis and 1290 Funds

Assuming the 90 days horizon Great West Loomis Sayles is expected to under-perform the 1290 Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Great West Loomis Sayles is 1.33 times less risky than 1290 Funds. The mutual fund trades about -0.29 of its potential returns per unit of risk. The 1290 Funds is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  1,356  in 1290 Funds on October 10, 2024 and sell it today you would lose (39.00) from holding 1290 Funds or give up 2.88% of portfolio value over 90 days.

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

Great West Loomis Sayles  vs.  1290 Funds

Great West Loomis

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Loomis Sayles are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Great-west Loomis is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

1290 Funds

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 1290 Funds are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward-looking signals, 1290 Funds may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Great-west Loomis and 1290 Funds

The main advantage of trading using opposite Great-west Loomis and 1290 Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Loomis position performs unexpectedly, 1290 Funds 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 1290 Funds will offset losses from the drop in 1290 Funds' long position.

The idea behind Great West Loomis Sayles and 1290 Funds 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.