Correlation Between Loomis Sayles and Metropolitan West
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Metropolitan West 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 Loomis Sayles and Metropolitan West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis Sayles Investment and Metropolitan West Total, you can compare the effects of market volatilities on Loomis Sayles and Metropolitan West 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 Loomis Sayles with a short position of Metropolitan West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Metropolitan West.
Diversification Opportunities for Loomis Sayles and Metropolitan West
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loomis and Metropolitan is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Investment and Metropolitan West Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West Total and Loomis Sayles 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 Loomis Sayles Investment are associated (or correlated) with Metropolitan West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan West Total has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Metropolitan West go up and down completely randomly.
Pair Corralation between Loomis Sayles and Metropolitan West
Assuming the 90 days horizon Loomis Sayles Investment is expected to generate 0.82 times more return on investment than Metropolitan West. However, Loomis Sayles Investment is 1.22 times less risky than Metropolitan West. It trades about 0.06 of its potential returns per unit of risk. Metropolitan West Total is currently generating about 0.04 per unit of risk. If you would invest 909.00 in Loomis Sayles Investment on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Loomis Sayles Investment or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Loomis Sayles Investment vs. Metropolitan West Total
Performance |
| Timeline |
| Loomis Sayles Investment |
| Metropolitan West Total |
Loomis Sayles and Metropolitan West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and Metropolitan West
The main advantage of trading using opposite Loomis Sayles and Metropolitan West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Metropolitan West 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 Metropolitan West will offset losses from the drop in Metropolitan West's long position.| Loomis Sayles vs. Asg Managed Futures | Loomis Sayles vs. Asg Managed Futures | Loomis Sayles vs. Natixis Oakmark | Loomis Sayles vs. Natixis Oakmark International |
| Metropolitan West vs. Siit High Yield | Metropolitan West vs. Gmo High Yield | Metropolitan West vs. Virtus High Yield | Metropolitan West vs. Alpine High Yield |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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