Correlation Between Pimco Incme and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Pimco Incme 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 Pimco Incme and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Incme Fund and Loomis Sayles Strategic, you can compare the effects of market volatilities on Pimco Incme 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 Pimco Incme with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Incme and Loomis Sayles.
Diversification Opportunities for Pimco Incme and Loomis Sayles
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pimco and Loomis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Incme Fund and Loomis Sayles Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Strategic and Pimco Incme 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 Pimco Incme Fund 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 Strategic has no effect on the direction of Pimco Incme i.e., Pimco Incme and Loomis Sayles go up and down completely randomly.
Pair Corralation between Pimco Incme and Loomis Sayles
Assuming the 90 days horizon Pimco Incme is expected to generate 1.26 times less return on investment than Loomis Sayles. But when comparing it to its historical volatility, Pimco Incme Fund is 1.22 times less risky than Loomis Sayles. It trades about 0.1 of its potential returns per unit of risk. Loomis Sayles Strategic is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,083 in Loomis Sayles Strategic on September 12, 2024 and sell it today you would earn a total of 147.00 from holding Loomis Sayles Strategic or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Incme Fund vs. Loomis Sayles Strategic
Performance |
| Timeline |
| Pimco Incme Fund |
| Loomis Sayles Strategic |
Pimco Incme and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Incme and Loomis Sayles
The main advantage of trading using opposite Pimco Incme and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Incme 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.| Pimco Incme vs. Pimco Income Fund | Pimco Incme vs. Pimco Income Fund | Pimco Incme vs. Pimco Income Fund | Pimco Incme vs. Pimco Income Fund |
| Loomis Sayles vs. Pimco Income Fund | Loomis Sayles vs. Pimco Income Fund | Loomis Sayles vs. Pimco Incme Fund | Loomis Sayles vs. Pimco Income Fund |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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