Correlation Between Putnam Retirement and Loomis Sayles

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Can any of the company-specific risk be diversified away by investing in both Putnam Retirement and Loomis Sayles 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 Putnam Retirement and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putnam Retirement Advantage and Loomis Sayles Smallmid, you can compare the effects of market volatilities on Putnam Retirement and Loomis Sayles 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 Putnam Retirement with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putnam Retirement and Loomis Sayles.

Diversification Opportunities for Putnam Retirement and Loomis Sayles

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Putnam and Loomis is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Putnam Retirement Advantage and Loomis Sayles Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Smallmid and Putnam Retirement 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 Putnam Retirement Advantage are associated (or correlated) with Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles Smallmid has no effect on the direction of Putnam Retirement i.e., Putnam Retirement and Loomis Sayles go up and down completely randomly.

Pair Corralation between Putnam Retirement and Loomis Sayles

Assuming the 90 days horizon Putnam Retirement Advantage is expected to under-perform the Loomis Sayles. In addition to that, Putnam Retirement is 1.34 times more volatile than Loomis Sayles Smallmid. It trades about -0.26 of its total potential returns per unit of risk. Loomis Sayles Smallmid is currently generating about -0.15 per unit of volatility. If you would invest  1,434  in Loomis Sayles Smallmid on October 9, 2024 and sell it today you would lose (45.00) from holding Loomis Sayles Smallmid or give up 3.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Putnam Retirement Advantage  vs.  Loomis Sayles Smallmid

 Performance 
       Timeline  
Putnam Retirement 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Putnam Retirement Advantage has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Putnam Retirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Loomis Sayles Smallmid 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Smallmid are ranked lower than 3 (%) 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.

Putnam Retirement and Loomis Sayles Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Putnam Retirement and Loomis Sayles

The main advantage of trading using opposite Putnam Retirement and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnam Retirement position performs unexpectedly, Loomis Sayles 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 Loomis Sayles will offset losses from the drop in Loomis Sayles' long position.
The idea behind Putnam Retirement Advantage and Loomis Sayles Smallmid 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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