Correlation Between American Beacon and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both American Beacon 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 American Beacon and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon Large and Loomis Sayles Small, you can compare the effects of market volatilities on American Beacon 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 American Beacon with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Loomis Sayles.
Diversification Opportunities for American Beacon and Loomis Sayles
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Loomis is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon Large 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 American Beacon 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 American Beacon Large 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 American Beacon i.e., American Beacon and Loomis Sayles go up and down completely randomly.
Pair Corralation between American Beacon and Loomis Sayles
Assuming the 90 days horizon American Beacon is expected to generate 1.34 times less return on investment than Loomis Sayles. But when comparing it to its historical volatility, American Beacon Large is 1.81 times less risky than Loomis Sayles. It trades about 0.13 of its potential returns per unit of risk. Loomis Sayles Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,398 in Loomis Sayles Small on September 1, 2024 and sell it today you would earn a total of 399.00 from holding Loomis Sayles Small or generate 16.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon Large vs. Loomis Sayles Small
Performance |
| Timeline |
| American Beacon Large |
| Loomis Sayles Small |
American Beacon and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Loomis Sayles
The main advantage of trading using opposite American Beacon and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon 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.| American Beacon vs. Northern Small Cap | American Beacon vs. Ssga International Stock | American Beacon vs. American Beacon International | American Beacon vs. Perkins Mid Cap |
| Loomis Sayles vs. Mainstay Large Cap | Loomis Sayles vs. Mfs Value Fund | Loomis Sayles vs. Harbor Capital Appreciation | Loomis Sayles vs. Goldman Sachs Small |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |