Correlation Between Loomis Sayles and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis Sayles Strategic and Dow Jones Industrial, you can compare the effects of market volatilities on Loomis Sayles and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Dow Jones.
Diversification Opportunities for Loomis Sayles and Dow Jones
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Loomis and Dow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Strategic and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Strategic are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Dow Jones go up and down completely randomly.
Pair Corralation between Loomis Sayles and Dow Jones
Assuming the 90 days horizon Loomis Sayles Strategic is expected to generate 0.35 times more return on investment than Dow Jones. However, Loomis Sayles Strategic is 2.83 times less risky than Dow Jones. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.21 per unit of risk. If you would invest 1,216 in Loomis Sayles Strategic on November 28, 2024 and sell it today you would earn a total of 10.00 from holding Loomis Sayles Strategic or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Loomis Sayles Strategic vs. Dow Jones Industrial
Performance |
| Timeline |
Loomis Sayles and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Loomis Sayles Strategic
Pair trading matchups for Loomis Sayles
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Loomis Sayles and Dow Jones
The main advantage of trading using opposite Loomis Sayles and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Loomis Sayles vs. World Energy Fund | Loomis Sayles vs. Pimco Energy Tactical | Loomis Sayles vs. Oil Gas Ultrasector | Loomis Sayles vs. Clearbridge Energy Mlp |
| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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