Correlation Between Aberdeen Global and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Aberdeen Global 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 Aberdeen Global and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Global High and Loomis Sayles Bond, you can compare the effects of market volatilities on Aberdeen Global 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 Aberdeen Global with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Loomis Sayles.
Diversification Opportunities for Aberdeen Global and Loomis Sayles
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aberdeen and Loomis is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global High and Loomis Sayles Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Bond and Aberdeen Global 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 Aberdeen Global High 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 Bond has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Loomis Sayles go up and down completely randomly.
Pair Corralation between Aberdeen Global and Loomis Sayles
Assuming the 90 days horizon Aberdeen Global is expected to generate 1.26 times less return on investment than Loomis Sayles. But when comparing it to its historical volatility, Aberdeen Global High is 1.3 times less risky than Loomis Sayles. It trades about 0.06 of its potential returns per unit of risk. Loomis Sayles Bond is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,181 in Loomis Sayles Bond on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Loomis Sayles Bond or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aberdeen Global High vs. Loomis Sayles Bond
Performance |
| Timeline |
| Aberdeen Global High |
| Loomis Sayles Bond |
Aberdeen Global and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aberdeen Global and Loomis Sayles
The main advantage of trading using opposite Aberdeen Global and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global 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.| Aberdeen Global vs. Metropolitan West High | Aberdeen Global vs. Westcore Plus Bond | Aberdeen Global vs. Loomis Sayles Bond | Aberdeen Global vs. Equity Series Class |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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