Correlation Between Semiconductor Ultrasector and Loomis Sayles

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

By analyzing existing cross correlation between Semiconductor Ultrasector Profund and Loomis Sayles Strategic, you can compare the effects of market volatilities on Semiconductor Ultrasector 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 Semiconductor Ultrasector with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semiconductor Ultrasector and Loomis Sayles.

Diversification Opportunities for Semiconductor Ultrasector and Loomis Sayles

0.14

Correlation Coefficient

Semiconductor Ultrasector  Loomis Sayles

Average diversification

The 3 months correlation between Semiconductor and Loomis is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Semiconductor Ultrasector Prof and Loomis Sayles Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Strategic and Semiconductor Ultrasector 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 Semiconductor Ultrasector Profund 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 Strategic has no effect on the direction of Semiconductor Ultrasector i.e., Semiconductor Ultrasector and Loomis Sayles go up and down completely randomly.

Pair Corralation between Semiconductor Ultrasector and Loomis Sayles

Assuming the 90 days horizon Semiconductor Ultrasector Profund is expected to generate 13.12 times more return on investment than Loomis Sayles. However, Semiconductor Ultrasector is 13.12 times more volatile than Loomis Sayles Strategic. It trades about 0.1 of its potential returns per unit of risk. Loomis Sayles Strategic is currently generating about 0.14 per unit of risk. If you would invest  3,682  in Semiconductor Ultrasector Profund on September 3, 2024 and sell it today you would earn a total of  676.00  from holding Semiconductor Ultrasector Profund or generate 18.36% return on investment over 90 days.

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

Semiconductor Ultrasector Prof  vs.  Loomis Sayles Strategic

Semiconductor Ultrasector

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Semiconductor Ultrasector Profund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Semiconductor Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

Loomis Sayles Strategic

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Strategic are ranked lower than 10 (%) 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.

Pair Trading with Semiconductor Ultrasector and Loomis Sayles

The main advantage of trading using opposite Semiconductor Ultrasector and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semiconductor Ultrasector 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 Semiconductor Ultrasector Profund and Loomis Sayles Strategic 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.