Correlation Between Visa and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Loomis Sayles Securitized, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Loomis Sayles.
Diversification Opportunities for Visa and Loomis Sayles
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Loomis is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Loomis Sayles Securitized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Securitized and Visa 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 Visa Class A 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 Securitized has no effect on the direction of Visa i.e., Visa and Loomis Sayles go up and down completely randomly.
Pair Corralation between Visa and Loomis Sayles
Taking into account the 90-day investment horizon Visa Class A is expected to generate 2.47 times more return on investment than Loomis Sayles. However, Visa is 2.47 times more volatile than Loomis Sayles Securitized. It trades about 0.09 of its potential returns per unit of risk. Loomis Sayles Securitized is currently generating about 0.05 per unit of risk. If you would invest 20,975 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 10,690 from holding Visa Class A or generate 50.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Loomis Sayles Securitized
Performance |
| Timeline |
| Visa Class A |
| Loomis Sayles Securitized |
Visa and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Loomis Sayles
The main advantage of trading using opposite Visa and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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