Correlation Between Loomis Sayles and Prudential Financial
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Prudential Financial 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 Prudential Financial 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 Prudential Financial Services, you can compare the effects of market volatilities on Loomis Sayles and Prudential Financial 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 Prudential Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Prudential Financial.
Diversification Opportunities for Loomis Sayles and Prudential Financial
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Loomis and Prudential is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Strategic and Prudential Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Financial 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 Prudential Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Financial has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Prudential Financial go up and down completely randomly.
Pair Corralation between Loomis Sayles and Prudential Financial
Assuming the 90 days horizon Loomis Sayles Strategic is expected to generate 0.32 times more return on investment than Prudential Financial. However, Loomis Sayles Strategic is 3.09 times less risky than Prudential Financial. It trades about 0.05 of its potential returns per unit of risk. Prudential Financial Services is currently generating about -0.08 per unit of risk. If you would invest 1,227 in Loomis Sayles Strategic on September 12, 2024 and sell it today you would earn a total of 3.00 from holding Loomis Sayles Strategic or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Strategic vs. Prudential Financial Services
Performance |
| Timeline |
| Loomis Sayles Strategic |
| Prudential Financial |
Loomis Sayles and Prudential Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and Prudential Financial
The main advantage of trading using opposite Loomis Sayles and Prudential Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Prudential Financial 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 Prudential Financial will offset losses from the drop in Prudential Financial's long position.| Loomis Sayles vs. Pimco Income Fund | Loomis Sayles vs. Pimco Income Fund | Loomis Sayles vs. Pimco Incme Fund | Loomis Sayles vs. Pimco Income Fund |
| Prudential Financial vs. Vanguard Financials Index | Prudential Financial vs. Regional Bank Fund | Prudential Financial vs. Regional Bank Fund | Prudential Financial vs. T Rowe Price |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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