Correlation Between Tiaa-cref High-yield and Loomis Sayles

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

By analyzing existing cross correlation between Tiaa Cref High Yield Fund and Loomis Sayles Smallmid, you can compare the effects of market volatilities on Tiaa-cref High-yield 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 Tiaa-cref High-yield with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref High-yield and Loomis Sayles.

Diversification Opportunities for Tiaa-cref High-yield and Loomis Sayles

0.12

Correlation Coefficient

Tiaa-cref High-yield  Loomis Sayles

Average diversification

The 3 months correlation between Tiaa-cref and Loomis is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref High Yield Fund 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 Tiaa-cref High-yield 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 Tiaa Cref High Yield Fund 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 Tiaa-cref High-yield i.e., Tiaa-cref High-yield and Loomis Sayles go up and down completely randomly.

Pair Corralation between Tiaa-cref High-yield and Loomis Sayles

Assuming the 90 days horizon Tiaa Cref High Yield Fund is expected to generate 0.17 times more return on investment than Loomis Sayles. However, Tiaa Cref High Yield Fund is 5.99 times less risky than Loomis Sayles. It trades about 0.1 of its potential returns per unit of risk. Loomis Sayles Smallmid is currently generating about -0.06 per unit of risk. If you would invest  869.00  in Tiaa Cref High Yield Fund on December 21, 2024 and sell it today you would earn a total of  10.00  from holding Tiaa Cref High Yield Fund or generate 1.15% return on investment over 90 days.

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

Tiaa Cref High Yield Fund  vs.  Loomis Sayles Smallmid

Tiaa-cref High-yield

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref High Yield Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Tiaa-cref High-yield 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

Very Weak

Over the last 90 days Loomis Sayles Smallmid has generated negative risk-adjusted returns adding no value to fund investors. 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 Tiaa-cref High-yield and Loomis Sayles

The main advantage of trading using opposite Tiaa-cref High-yield and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref High-yield 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 Tiaa Cref High Yield Fund 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.