Correlation Between Touchstone Sands and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Touchstone Sands 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 Touchstone Sands and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Sands Capital and Loomis Sayles Bond, you can compare the effects of market volatilities on Touchstone Sands 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 Touchstone Sands with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and Loomis Sayles.
Diversification Opportunities for Touchstone Sands and Loomis Sayles
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Touchstone and Loomis is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and Loomis Sayles Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Bond and Touchstone Sands 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 Touchstone Sands Capital 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 Bond has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and Loomis Sayles go up and down completely randomly.
Pair Corralation between Touchstone Sands and Loomis Sayles
Assuming the 90 days horizon Touchstone Sands is expected to generate 2.07 times less return on investment than Loomis Sayles. In addition to that, Touchstone Sands is 3.58 times more volatile than Loomis Sayles Bond. It trades about 0.02 of its total potential returns per unit of risk. Loomis Sayles Bond is currently generating about 0.18 per unit of volatility. If you would invest 1,115 in Loomis Sayles Bond on September 1, 2024 and sell it today you would earn a total of 68.00 from holding Loomis Sayles Bond or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Touchstone Sands Capital vs. Loomis Sayles Bond
Performance |
| Timeline |
| Touchstone Sands Capital |
| Loomis Sayles Bond |
Touchstone Sands and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Sands and Loomis Sayles
The main advantage of trading using opposite Touchstone Sands and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands 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.| Touchstone Sands vs. Touchstone Small Cap | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth | Touchstone Sands vs. Mid Cap Growth |
| Loomis Sayles vs. Loomis Sayles Inflation | Loomis Sayles vs. Loomis Sayles Inflation | Loomis Sayles vs. Loomis Sayles Bond | Loomis Sayles vs. Loomis Sayles Bond |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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