Correlation Between Loomis Sayles and Northern Small
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Northern Small 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 Northern Small 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 Northern Small Cap, you can compare the effects of market volatilities on Loomis Sayles and Northern Small 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 Northern Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Northern Small.
Diversification Opportunities for Loomis Sayles and Northern Small
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Loomis and Northern is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Bond and Northern Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Small Cap 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 Northern Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Small Cap has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Northern Small go up and down completely randomly.
Pair Corralation between Loomis Sayles and Northern Small
Assuming the 90 days horizon Loomis Sayles Bond is expected to generate 0.05 times more return on investment than Northern Small. However, Loomis Sayles Bond is 21.73 times less risky than Northern Small. It trades about 0.05 of its potential returns per unit of risk. Northern Small Cap is currently generating about -0.12 per unit of risk. If you would invest 1,167 in Loomis Sayles Bond on October 26, 2024 and sell it today you would earn a total of 8.00 from holding Loomis Sayles Bond or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Bond vs. Northern Small Cap
Performance |
| Timeline |
| Loomis Sayles Bond |
| Northern Small Cap |
Loomis Sayles and Northern Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and Northern Small
The main advantage of trading using opposite Loomis Sayles and Northern Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Northern Small 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 Northern Small will offset losses from the drop in Northern Small'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 |
| Northern Small vs. American Beacon Large | Northern Small vs. Harbor International Fund | Northern Small vs. Credit Suisse Modity | Northern Small 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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