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 Bond and Metropolitan West High, 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
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Loomis and Metropolitan is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Bond and Metropolitan West High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan West High 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 Bond 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 High 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 Bond is expected to generate 1.47 times more return on investment than Metropolitan West. However, Loomis Sayles is 1.47 times more volatile than Metropolitan West High. It trades about 0.1 of its potential returns per unit of risk. Metropolitan West High is currently generating about 0.14 per unit of risk. If you would invest 1,054 in Loomis Sayles Bond on August 26, 2024 and sell it today you would earn a total of 127.00 from holding Loomis Sayles Bond or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Bond vs. Metropolitan West High
Performance |
| Timeline |
| Loomis Sayles Bond |
| Metropolitan West High |
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. Metropolitan West Total | Loomis Sayles vs. Harbor Bond Fund | Loomis Sayles vs. Doubleline Total Return | Loomis Sayles vs. Fidelity Advisor Floating |
| Metropolitan West vs. Federated Total Return | Metropolitan West vs. Government Bond Fund | Metropolitan West vs. Aberdeen Global High | Metropolitan West vs. Metropolitan West Total |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |