Correlation Between Loomis Sayles and Capital World
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Capital World 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 Capital World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis Sayles Global and Capital World Bond, you can compare the effects of market volatilities on Loomis Sayles and Capital World 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 Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Capital World.
Diversification Opportunities for Loomis Sayles and Capital World
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Loomis and Capital is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Global and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond 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 Global are associated (or correlated) with Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Capital World go up and down completely randomly.
Pair Corralation between Loomis Sayles and Capital World
Assuming the 90 days horizon Loomis Sayles Global is expected to generate 1.08 times more return on investment than Capital World. However, Loomis Sayles is 1.08 times more volatile than Capital World Bond. It trades about 0.07 of its potential returns per unit of risk. Capital World Bond is currently generating about 0.06 per unit of risk. If you would invest 1,386 in Loomis Sayles Global on September 1, 2024 and sell it today you would earn a total of 44.00 from holding Loomis Sayles Global or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Loomis Sayles Global vs. Capital World Bond
Performance |
| Timeline |
| Loomis Sayles Global |
| Capital World Bond |
Loomis Sayles and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and Capital World
The main advantage of trading using opposite Loomis Sayles and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Loomis Sayles vs. Loomis Sayles Bond | Loomis Sayles vs. T Rowe Price | Loomis Sayles vs. Westcore Plus Bond | Loomis Sayles vs. Aberdeen Global High |
| Capital World vs. Gmo Resources | Capital World vs. Dreyfus Natural Resources | Capital World vs. Franklin Natural Resources | Capital World vs. Oil Gas Ultrasector |
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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