Correlation Between Franklin Strategic and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Franklin Strategic 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 Franklin Strategic and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Strategic Income and Loomis Sayles Strategic, you can compare the effects of market volatilities on Franklin Strategic 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 Franklin Strategic with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Strategic and Loomis Sayles.
Diversification Opportunities for Franklin Strategic and Loomis Sayles
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Franklin and Loomis is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Strategic Income 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 Franklin Strategic 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 Franklin Strategic Income 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 Franklin Strategic i.e., Franklin Strategic and Loomis Sayles go up and down completely randomly.
Pair Corralation between Franklin Strategic and Loomis Sayles
Assuming the 90 days horizon Franklin Strategic Income is expected to generate 0.69 times more return on investment than Loomis Sayles. However, Franklin Strategic Income is 1.45 times less risky than Loomis Sayles. It trades about 0.02 of its potential returns per unit of risk. Loomis Sayles Strategic is currently generating about 0.01 per unit of risk. If you would invest 789.00 in Franklin Strategic Income on January 19, 2024 and sell it today you would earn a total of 23.00 from holding Franklin Strategic Income or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Strategic Income vs. Loomis Sayles Strategic
Performance |
| Timeline |
| Franklin Strategic |
| Loomis Sayles Strategic |
Franklin Strategic and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Strategic and Loomis Sayles
The main advantage of trading using opposite Franklin Strategic and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Strategic 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.| Franklin Strategic vs. HUMANA INC | Franklin Strategic vs. Aquagold International | Franklin Strategic vs. Thrivent High Yield | Franklin Strategic vs. Morningstar Unconstrained Allocation |
| Loomis Sayles vs. HUMANA INC | Loomis Sayles vs. Aquagold International | Loomis Sayles vs. Thrivent High Yield | Loomis Sayles vs. Morningstar Unconstrained Allocation |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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