Correlation Between Gateway Equity and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Gateway Equity 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 Gateway Equity and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gateway Equity Call and Loomis Sayles International, you can compare the effects of market volatilities on Gateway Equity 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 Gateway Equity with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gateway Equity and Loomis Sayles.
Diversification Opportunities for Gateway Equity and Loomis Sayles
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gateway and Loomis is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Equity Call and Loomis Sayles International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Intern and Gateway Equity 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 Gateway Equity Call 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 Intern has no effect on the direction of Gateway Equity i.e., Gateway Equity and Loomis Sayles go up and down completely randomly.
Pair Corralation between Gateway Equity and Loomis Sayles
Assuming the 90 days horizon Gateway Equity is expected to generate 1.19 times less return on investment than Loomis Sayles. But when comparing it to its historical volatility, Gateway Equity Call is 1.95 times less risky than Loomis Sayles. It trades about 0.11 of its potential returns per unit of risk. Loomis Sayles International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 815.00 in Loomis Sayles International on November 29, 2024 and sell it today you would earn a total of 318.00 from holding Loomis Sayles International or generate 39.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gateway Equity Call vs. Loomis Sayles International
Performance |
| Timeline |
| Gateway Equity Call |
| Loomis Sayles Intern |
Gateway Equity and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gateway Equity and Loomis Sayles
The main advantage of trading using opposite Gateway Equity and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gateway Equity 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.| Gateway Equity vs. Touchstone Ultra Short | Gateway Equity vs. Barings Active Short | Gateway Equity vs. Ultra Short Fixed Income | Gateway Equity vs. Versatile Bond 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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