Correlation Between Global Opportunity and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Global Opportunity and Loomis Sayles 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 Global Opportunity and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Opportunity Portfolio and Loomis Sayles Global, you can compare the effects of market volatilities on Global Opportunity and Loomis Sayles 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 Global Opportunity with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Opportunity and Loomis Sayles.
Diversification Opportunities for Global Opportunity and Loomis Sayles
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Loomis is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Global Opportunity Portfolio and Loomis Sayles Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Global and Global Opportunity 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 Global Opportunity Portfolio are associated (or correlated) with Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles Global has no effect on the direction of Global Opportunity i.e., Global Opportunity and Loomis Sayles go up and down completely randomly.
Pair Corralation between Global Opportunity and Loomis Sayles
Assuming the 90 days horizon Global Opportunity Portfolio is expected to generate 1.66 times more return on investment than Loomis Sayles. However, Global Opportunity is 1.66 times more volatile than Loomis Sayles Global. It trades about 0.07 of its potential returns per unit of risk. Loomis Sayles Global is currently generating about 0.05 per unit of risk. If you would invest 2,571 in Global Opportunity Portfolio on August 30, 2024 and sell it today you would earn a total of 1,348 from holding Global Opportunity Portfolio or generate 52.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Opportunity Portfolio vs. Loomis Sayles Global
Performance |
| Timeline |
| Global Opportunity |
| Loomis Sayles Global |
Global Opportunity and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Opportunity and Loomis Sayles
The main advantage of trading using opposite Global Opportunity and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Opportunity position performs unexpectedly, Loomis Sayles 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 Loomis Sayles will offset losses from the drop in Loomis Sayles' long position.| Global Opportunity vs. Morgan Stanley Multi | Global Opportunity vs. Growth Portfolio Class | Global Opportunity vs. Morgan Stanley Insti | Global Opportunity vs. Virtus Kar Small Cap |
| Loomis Sayles vs. Capital Income Builder | Loomis Sayles vs. Capital Income Builder | Loomis Sayles vs. Capital Income Builder | Loomis Sayles vs. HUMANA INC |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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