Correlation Between Westwood Largecap and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Westwood Largecap 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 Westwood Largecap and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Largecap Value and Loomis Sayles Inflation, you can compare the effects of market volatilities on Westwood Largecap 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 Westwood Largecap with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Largecap and Loomis Sayles.
Diversification Opportunities for Westwood Largecap and Loomis Sayles
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westwood and Loomis is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Largecap Value and Loomis Sayles Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Inflation and Westwood Largecap 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 Westwood Largecap Value 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 Inflation has no effect on the direction of Westwood Largecap i.e., Westwood Largecap and Loomis Sayles go up and down completely randomly.
Pair Corralation between Westwood Largecap and Loomis Sayles
Assuming the 90 days horizon Westwood Largecap Value is expected to generate 2.33 times more return on investment than Loomis Sayles. However, Westwood Largecap is 2.33 times more volatile than Loomis Sayles Inflation. It trades about 0.13 of its potential returns per unit of risk. Loomis Sayles Inflation is currently generating about 0.08 per unit of risk. If you would invest 1,392 in Westwood Largecap Value on September 1, 2024 and sell it today you would earn a total of 158.00 from holding Westwood Largecap Value or generate 11.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Largecap Value vs. Loomis Sayles Inflation
Performance |
| Timeline |
| Westwood Largecap Value |
| Loomis Sayles Inflation |
Westwood Largecap and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Largecap and Loomis Sayles
The main advantage of trading using opposite Westwood Largecap and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Largecap 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.| Westwood Largecap vs. Morningstar Municipal Bond | Westwood Largecap vs. California High Yield Municipal | Westwood Largecap vs. Blrc Sgy Mnp | Westwood Largecap vs. T Rowe Price |
| Loomis Sayles vs. Loomis Sayles Inflation | Loomis Sayles vs. Loomis Sayles Bond | 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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