Correlation Between Aew Real and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Aew Real 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 Aew Real and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aew Real Estate and Loomis Sayles E, you can compare the effects of market volatilities on Aew Real 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 Aew Real with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aew Real and Loomis Sayles.
Diversification Opportunities for Aew Real and Loomis Sayles
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AEW and Loomis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Aew Real Estate and Loomis Sayles E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles E and Aew Real 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 Aew Real Estate 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 E has no effect on the direction of Aew Real i.e., Aew Real and Loomis Sayles go up and down completely randomly.
Pair Corralation between Aew Real and Loomis Sayles
Assuming the 90 days horizon Aew Real Estate is expected to generate 2.24 times more return on investment than Loomis Sayles. However, Aew Real is 2.24 times more volatile than Loomis Sayles E. It trades about 0.06 of its potential returns per unit of risk. Loomis Sayles E is currently generating about 0.03 per unit of risk. If you would invest 971.00 in Aew Real Estate on September 1, 2024 and sell it today you would earn a total of 214.00 from holding Aew Real Estate or generate 22.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aew Real Estate vs. Loomis Sayles E
Performance |
| Timeline |
| Aew Real Estate |
| Loomis Sayles E |
Aew Real and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aew Real and Loomis Sayles
The main advantage of trading using opposite Aew Real and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aew Real 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.| Aew Real vs. Mesirow Financial High | Aew Real vs. Pioneer High Yield | Aew Real vs. Dunham High Yield | Aew Real vs. Federated Institutional High |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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