Correlation Between Strategic Income and Loomis Sayles
Can any of the company-specific risk be diversified away by investing in both Strategic Income 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 Strategic Income and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Income Opportunities and Loomis Sayles Strategic, you can compare the effects of market volatilities on Strategic Income 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 Strategic Income with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Income and Loomis Sayles.
Diversification Opportunities for Strategic Income and Loomis Sayles
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Strategic and Loomis is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Income Opportunities 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 Strategic Income 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 Strategic Income Opportunities 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 Strategic Income i.e., Strategic Income and Loomis Sayles go up and down completely randomly.
Pair Corralation between Strategic Income and Loomis Sayles
Assuming the 90 days horizon Strategic Income Opportunities is expected to generate 0.69 times more return on investment than Loomis Sayles. However, Strategic Income Opportunities is 1.44 times less risky than Loomis Sayles. It trades about -0.31 of its potential returns per unit of risk. Loomis Sayles Strategic is currently generating about -0.28 per unit of risk. If you would invest 991.00 in Strategic Income Opportunities on January 20, 2024 and sell it today you would lose (18.00) from holding Strategic Income Opportunities or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Income Opportunities vs. Loomis Sayles Strategic
Performance |
| Timeline |
| Strategic Me Opportu |
| Loomis Sayles Strategic |
Strategic Income and Loomis Sayles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Income and Loomis Sayles
The main advantage of trading using opposite Strategic Income and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Income 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.| Strategic Income vs. Regional Bank Fund | Strategic Income vs. Regional Bank Fund | Strategic Income vs. Multimanager Lifestyle Moderate | Strategic Income vs. Multimanager Lifestyle Balanced |
| Loomis Sayles vs. Asg Managed Futures | Loomis Sayles vs. Asg Managed Futures | Loomis Sayles vs. Natixis Oakmark | Loomis Sayles vs. Natixis Oakmark International |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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