Correlation Between Balanced Fund and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Investor and Loomis Sayles Small, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Loomis Sayles.
Diversification Opportunities for Balanced Fund and Loomis Sayles
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Loomis is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Investor and Loomis Sayles Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Small and Balanced Fund 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 Balanced Fund Investor 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 Small has no effect on the direction of Balanced Fund i.e., Balanced Fund and Loomis Sayles go up and down completely randomly.
Pair Corralation between Balanced Fund and Loomis Sayles
Assuming the 90 days horizon Balanced Fund Investor is expected to generate 0.38 times more return on investment than Loomis Sayles. However, Balanced Fund Investor is 2.62 times less risky than Loomis Sayles. It trades about 0.1 of its potential returns per unit of risk. Loomis Sayles Small is currently generating about 0.02 per unit of risk. If you would invest 1,517 in Balanced Fund Investor on September 26, 2024 and sell it today you would earn a total of 471.00 from holding Balanced Fund Investor or generate 31.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Balanced Fund Investor vs. Loomis Sayles Small
Performance |
Timeline |
Balanced Fund Investor |
Loomis Sayles Small |
Balanced Fund and Loomis Sayles Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Balanced Fund and Loomis Sayles
The main advantage of trading using opposite Balanced Fund and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.Balanced Fund vs. One Choice Portfolio | Balanced Fund vs. One Choice Portfolio | Balanced Fund vs. One Choice Portfolio | Balanced Fund vs. One Choice Portfolio |
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Check out your portfolio center.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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