Correlation Between Loomis Sayles and Lkcm Small
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Lkcm 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 Lkcm Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis Sayles Smallmid and Lkcm Small Cap, you can compare the effects of market volatilities on Loomis Sayles and Lkcm 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 Lkcm Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Lkcm Small.
Diversification Opportunities for Loomis Sayles and Lkcm Small
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loomis and Lkcm is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Smallmid and Lkcm Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lkcm 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 Smallmid are associated (or correlated) with Lkcm Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lkcm Small Cap has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Lkcm Small go up and down completely randomly.
Pair Corralation between Loomis Sayles and Lkcm Small
Assuming the 90 days horizon Loomis Sayles Smallmid is expected to generate 0.8 times more return on investment than Lkcm Small. However, Loomis Sayles Smallmid is 1.24 times less risky than Lkcm Small. It trades about 0.12 of its potential returns per unit of risk. Lkcm Small Cap is currently generating about 0.06 per unit of risk. If you would invest 1,235 in Loomis Sayles Smallmid on November 3, 2024 and sell it today you would earn a total of 207.00 from holding Loomis Sayles Smallmid or generate 16.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Smallmid vs. Lkcm Small Cap
Performance |
| Timeline |
| Loomis Sayles Smallmid |
| Lkcm Small Cap |
Loomis Sayles and Lkcm Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and Lkcm Small
The main advantage of trading using opposite Loomis Sayles and Lkcm Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Lkcm 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 Lkcm Small will offset losses from the drop in Lkcm Small's long position.| Loomis Sayles vs. Ashmore Emerging Markets | Loomis Sayles vs. Aqr Tm Emerging | Loomis Sayles vs. Dodge Cox Emerging | Loomis Sayles vs. Barings Emerging Markets |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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