Correlation Between Loomis Sayles and Spectrum Income
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Spectrum Income 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 Spectrum Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loomis Sayles Strategic and Spectrum Income Fund, you can compare the effects of market volatilities on Loomis Sayles and Spectrum Income 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 Spectrum Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Spectrum Income.
Diversification Opportunities for Loomis Sayles and Spectrum Income
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Loomis and Spectrum is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Strategic and Spectrum Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Me 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 Strategic are associated (or correlated) with Spectrum Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Me Fund has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Spectrum Income go up and down completely randomly.
Pair Corralation between Loomis Sayles and Spectrum Income
Assuming the 90 days horizon Loomis Sayles Strategic is expected to generate 1.3 times more return on investment than Spectrum Income. However, Loomis Sayles is 1.3 times more volatile than Spectrum Income Fund. It trades about 0.05 of its potential returns per unit of risk. Spectrum Income Fund is currently generating about 0.05 per unit of risk. If you would invest 1,106 in Loomis Sayles Strategic on January 26, 2024 and sell it today you would earn a total of 50.00 from holding Loomis Sayles Strategic or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Strategic vs. Spectrum Income Fund
Performance |
| Timeline |
| Loomis Sayles Strategic |
| Spectrum Me Fund |
Loomis Sayles and Spectrum Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and Spectrum Income
The main advantage of trading using opposite Loomis Sayles and Spectrum Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Spectrum Income 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 Spectrum Income will offset losses from the drop in Spectrum Income's long position.| Loomis Sayles vs. Merck Company | Loomis Sayles vs. Chevron Corp | Loomis Sayles vs. MagnaChip Semiconductor |
| Spectrum Income vs. Merck Company | Spectrum Income vs. Chevron Corp | Spectrum Income vs. MagnaChip Semiconductor |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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