Correlation Between International Investors and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both International Investors 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 International Investors and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Loomis Sayles Institutional, you can compare the effects of market volatilities on International Investors 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 International Investors with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Loomis Sayles.
Diversification Opportunities for International Investors and Loomis Sayles
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between International and Loomis is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Loomis Sayles Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Instit and International Investors 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 International Investors Gold 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 Instit has no effect on the direction of International Investors i.e., International Investors and Loomis Sayles go up and down completely randomly.
Pair Corralation between International Investors and Loomis Sayles
Assuming the 90 days horizon International Investors Gold is expected to generate 5.59 times more return on investment than Loomis Sayles. However, International Investors is 5.59 times more volatile than Loomis Sayles Institutional. It trades about 0.04 of its potential returns per unit of risk. Loomis Sayles Institutional is currently generating about 0.12 per unit of risk. If you would invest 732.00 in International Investors Gold on September 4, 2024 and sell it today you would earn a total of 234.00 from holding International Investors Gold or generate 31.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Loomis Sayles Institutional
Performance |
| Timeline |
| International Investors |
| Loomis Sayles Instit |
International Investors and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Loomis Sayles
The main advantage of trading using opposite International Investors and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors 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.The idea behind International Investors Gold and Loomis Sayles Institutional pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Loomis Sayles vs. Loomis Sayles Inflation | Loomis Sayles vs. Loomis Sayles Inflation | Loomis Sayles vs. Loomis Sayles Bond | Loomis Sayles vs. Loomis Sayles Bond |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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