Correlation Between Rbc Microcap and Loomis Sayles

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

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

Diversification Opportunities for Rbc Microcap and Loomis Sayles

-0.32

Correlation Coefficient

Rbc Microcap  Loomis Sayles

Very good diversification

The 3 months correlation between Rbc and Loomis is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Microcap Value and Loomis Sayles Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Global and Rbc Microcap 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 Rbc Microcap Value 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 Global has no effect on the direction of Rbc Microcap i.e., Rbc Microcap and Loomis Sayles go up and down completely randomly.

Pair Corralation between Rbc Microcap and Loomis Sayles

Assuming the 90 days horizon Rbc Microcap Value is expected to generate 2.96 times more return on investment than Loomis Sayles. However, Rbc Microcap is 2.96 times more volatile than Loomis Sayles Global. It trades about 0.03 of its potential returns per unit of risk. Loomis Sayles Global is currently generating about 0.02 per unit of risk. If you would invest  2,285  in Rbc Microcap Value on September 26, 2024 and sell it today you would earn a total of  394.00  from holding Rbc Microcap Value or generate 17.24% return on investment over 90 days.

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

Rbc Microcap Value  vs.  Loomis Sayles Global

Rbc Microcap Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbc Microcap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Rbc Microcap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Loomis Sayles Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loomis Sayles Global 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 Rbc Microcap and Loomis Sayles

The main advantage of trading using opposite Rbc Microcap and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbc Microcap 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 Rbc Microcap Value and Loomis Sayles Global 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.