Correlation Between Washington Mutual and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Washington Mutual 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 Washington Mutual and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Mutual Investors and Loomis Sayles Small, you can compare the effects of market volatilities on Washington Mutual 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 Washington Mutual with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Loomis Sayles.
Diversification Opportunities for Washington Mutual and Loomis Sayles
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Washington and Loomis is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Loomis Sayles Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Small and Washington Mutual 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 Washington Mutual Investors 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 Small has no effect on the direction of Washington Mutual i.e., Washington Mutual and Loomis Sayles go up and down completely randomly.
Pair Corralation between Washington Mutual and Loomis Sayles
Assuming the 90 days horizon Washington Mutual is expected to generate 2.68 times less return on investment than Loomis Sayles. But when comparing it to its historical volatility, Washington Mutual Investors is 2.44 times less risky than Loomis Sayles. It trades about 0.29 of its potential returns per unit of risk. Loomis Sayles Small is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,969 in Loomis Sayles Small on September 4, 2024 and sell it today you would earn a total of 346.00 from holding Loomis Sayles Small or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Loomis Sayles Small
Performance |
| Timeline |
| Washington Mutual |
| Loomis Sayles Small |
Washington Mutual and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Loomis Sayles
The main advantage of trading using opposite Washington Mutual and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual 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.| Washington Mutual vs. Franklin High Yield | Washington Mutual vs. Limited Term Tax | Washington Mutual vs. Vanguard California Long Term | Washington Mutual vs. Bbh Intermediate Municipal |
| Loomis Sayles vs. Mainstay Large Cap | Loomis Sayles vs. Mfs Value Fund | Loomis Sayles vs. Harbor Capital Appreciation | Loomis Sayles vs. Goldman Sachs Small |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |