Correlation Between Loomis Sayles and New Economy
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and New Economy 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 Loomis Sayles and New Economy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis Sayles Growth and New Economy Fund, you can compare the effects of market volatilities on Loomis Sayles and New Economy 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 Loomis Sayles with a short position of New Economy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and New Economy.
Diversification Opportunities for Loomis Sayles and New Economy
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loomis and New is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Growth and New Economy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Economy Fund and Loomis Sayles 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 Loomis Sayles Growth are associated (or correlated) with New Economy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Economy Fund has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and New Economy go up and down completely randomly.
Pair Corralation between Loomis Sayles and New Economy
Assuming the 90 days horizon Loomis Sayles Growth is expected to under-perform the New Economy. But the mutual fund apears to be less risky and, when comparing its historical volatility, Loomis Sayles Growth is 1.04 times less risky than New Economy. The mutual fund trades about -0.27 of its potential returns per unit of risk. The New Economy Fund is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 6,006 in New Economy Fund on January 25, 2024 and sell it today you would lose (220.00) from holding New Economy Fund or give up 3.66% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Loomis Sayles Growth vs. New Economy Fund
Performance |
Timeline |
Loomis Sayles Growth |
New Economy Fund |
Loomis Sayles and New Economy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Loomis Sayles and New Economy
The main advantage of trading using opposite Loomis Sayles and New Economy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, New Economy 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 New Economy will offset losses from the drop in New Economy's long position.Loomis Sayles vs. Diamond Hill Large | Loomis Sayles vs. Natixis Equity Opportunities | Loomis Sayles vs. Diamond Hill Large |
New Economy vs. Income Fund Of | New Economy vs. New World Fund | New Economy vs. American Mutual Fund | New Economy vs. American Mutual Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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