Correlation Between Barloworld and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Barloworld 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 Barloworld and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Loomis Sayles Growth, you can compare the effects of market volatilities on Barloworld 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 Barloworld with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Loomis Sayles.
Diversification Opportunities for Barloworld and Loomis Sayles
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barloworld and Loomis is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Loomis Sayles Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Growth and Barloworld 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 Barloworld Ltd ADR 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 Growth has no effect on the direction of Barloworld i.e., Barloworld and Loomis Sayles go up and down completely randomly.
Pair Corralation between Barloworld and Loomis Sayles
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 5.84 times more return on investment than Loomis Sayles. However, Barloworld is 5.84 times more volatile than Loomis Sayles Growth. It trades about 0.03 of its potential returns per unit of risk. Loomis Sayles Growth is currently generating about 0.09 per unit of risk. If you would invest 510.00 in Barloworld Ltd ADR on October 25, 2024 and sell it today you would earn a total of 16.00 from holding Barloworld Ltd ADR or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.26% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Loomis Sayles Growth
Performance |
| Timeline |
| Barloworld ADR |
| Loomis Sayles Growth |
Barloworld and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Loomis Sayles
The main advantage of trading using opposite Barloworld and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld 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.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Loomis Sayles vs. American Mutual Fund | Loomis Sayles vs. Metropolitan West Total | Loomis Sayles vs. John Hancock Disciplined | Loomis Sayles vs. Edgewood Growth Fund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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