Correlation Between Large Cap and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Large Cap 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 Large Cap and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Large Cap Fund and Loomis Sayles Bond, you can compare the effects of market volatilities on Large Cap 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 Large Cap with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large Cap and Loomis Sayles.
Diversification Opportunities for Large Cap and Loomis Sayles
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Large and Loomis is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Fund 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 Large Cap 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 Large Cap Fund 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 Large Cap i.e., Large Cap and Loomis Sayles go up and down completely randomly.
Pair Corralation between Large Cap and Loomis Sayles
Assuming the 90 days horizon Large Cap Fund is expected to generate 4.75 times more return on investment than Loomis Sayles. However, Large Cap is 4.75 times more volatile than Loomis Sayles Bond. It trades about 0.16 of its potential returns per unit of risk. Loomis Sayles Bond is currently generating about -0.02 per unit of risk. If you would invest 1,696 in Large Cap Fund on August 25, 2024 and sell it today you would earn a total of 48.00 from holding Large Cap Fund or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Large Cap Fund vs. Loomis Sayles Bond
Performance |
| Timeline |
| Large Cap Fund |
| Loomis Sayles Bond |
Large Cap and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Large Cap and Loomis Sayles
The main advantage of trading using opposite Large Cap and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Large Cap 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.| Large Cap vs. Wasatch Large Cap | Large Cap vs. Loomis Sayles Bond | Large Cap vs. Harbor International Fund | Large Cap vs. Equity Series Class |
| Loomis Sayles vs. Metropolitan West Total | Loomis Sayles vs. Harbor Bond Fund | Loomis Sayles vs. Doubleline Total Return | Loomis Sayles vs. Fidelity Advisor Floating |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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