Correlation Between Loomis Sayles and American Mutual
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and American Mutual 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 American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis Sayles Growth and American Mutual Fund, you can compare the effects of market volatilities on Loomis Sayles and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and American Mutual.
Diversification Opportunities for Loomis Sayles and American Mutual
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loomis and American is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Growth and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 Growth are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and American Mutual go up and down completely randomly.
Pair Corralation between Loomis Sayles and American Mutual
Assuming the 90 days horizon Loomis Sayles Growth is expected to generate 1.76 times more return on investment than American Mutual. However, Loomis Sayles is 1.76 times more volatile than American Mutual Fund. It trades about 0.23 of its potential returns per unit of risk. American Mutual Fund is currently generating about 0.12 per unit of risk. If you would invest 2,914 in Loomis Sayles Growth on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Loomis Sayles Growth or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Growth vs. American Mutual Fund
Performance |
| Timeline |
| Loomis Sayles Growth |
| American Mutual |
Loomis Sayles and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and American Mutual
The main advantage of trading using opposite Loomis Sayles and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.The idea behind Loomis Sayles Growth and American Mutual Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| American Mutual vs. Pace Smallmedium Growth | American Mutual vs. L Abbett Growth | American Mutual vs. Champlain Mid Cap | American Mutual vs. Franklin Growth Opportunities |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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