Correlation Between Loomis Sayles and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Wells Fargo 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 Wells Fargo 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 Wells Fargo Large, you can compare the effects of market volatilities on Loomis Sayles and Wells Fargo 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 Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Wells Fargo.
Diversification Opportunities for Loomis Sayles and Wells Fargo
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loomis and Wells is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Growth and Wells Fargo Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Large 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 Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Large has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Wells Fargo go up and down completely randomly.
Pair Corralation between Loomis Sayles and Wells Fargo
Assuming the 90 days horizon Loomis Sayles Growth is expected to generate 1.02 times more return on investment than Wells Fargo. However, Loomis Sayles is 1.02 times more volatile than Wells Fargo Large. It trades about 0.35 of its potential returns per unit of risk. Wells Fargo Large is currently generating about 0.32 per unit of risk. If you would invest 2,885 in Loomis Sayles Growth on September 2, 2024 and sell it today you would earn a total of 216.00 from holding Loomis Sayles Growth or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Growth vs. Wells Fargo Large
Performance |
| Timeline |
| Loomis Sayles Growth |
| Wells Fargo Large |
Loomis Sayles and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and Wells Fargo
The main advantage of trading using opposite Loomis Sayles and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| Loomis Sayles vs. Loomis Sayles Growth | Loomis Sayles vs. Diamond Hill Large | Loomis Sayles vs. Diamond Hill Large |
| Wells Fargo vs. Wells Fargo Large | Wells Fargo vs. Loomis Sayles Growth | Wells Fargo vs. Invesco Disciplined Equity | Wells Fargo vs. Wells Fargo Large |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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