Correlation Between Loomis Sayles and New Economy
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and New Economy 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 New Economy 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 New Economy Fund, you can compare the effects of market volatilities on Loomis Sayles and New Economy 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 New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and New Economy.
Diversification Opportunities for Loomis Sayles and New Economy
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loomis and New is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Bond and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund 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 New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and New Economy go up and down completely randomly.
Pair Corralation between Loomis Sayles and New Economy
Assuming the 90 days horizon Loomis Sayles Bond is expected to generate 0.14 times more return on investment than New Economy. However, Loomis Sayles Bond is 6.9 times less risky than New Economy. It trades about 0.05 of its potential returns per unit of risk. New Economy Fund is currently generating about -0.02 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Bond vs. New Economy Fund
Performance |
| Timeline |
| Loomis Sayles Bond |
| New Economy Fund |
Loomis Sayles and New Economy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and New Economy
The main advantage of trading using opposite Loomis Sayles and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy'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 |
| New Economy vs. Federated Hermes Conservative | New Economy vs. Tax Free Conservative Income | New Economy vs. Voya Retirement Servative | New Economy vs. Calvert Conservative Allocation |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |