Correlation Between Loomis Sayles and United Parcel
Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and United Parcel 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 United Parcel 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 United Parcel Service, you can compare the effects of market volatilities on Loomis Sayles and United Parcel 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 United Parcel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and United Parcel.
Diversification Opportunities for Loomis Sayles and United Parcel
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Loomis and United is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Strategic and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service 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 United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and United Parcel go up and down completely randomly.
Pair Corralation between Loomis Sayles and United Parcel
Assuming the 90 days horizon Loomis Sayles Strategic is expected to generate 0.17 times more return on investment than United Parcel. However, Loomis Sayles Strategic is 5.74 times less risky than United Parcel. It trades about -0.24 of its potential returns per unit of risk. United Parcel Service is currently generating about -0.09 per unit of risk. If you would invest 1,180 in Loomis Sayles Strategic on January 25, 2024 and sell it today you would lose (24.00) from holding Loomis Sayles Strategic or give up 2.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loomis Sayles Strategic vs. United Parcel Service
Performance |
| Timeline |
| Loomis Sayles Strategic |
| United Parcel Service |
Loomis Sayles and United Parcel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loomis Sayles and United Parcel
The main advantage of trading using opposite Loomis Sayles and United Parcel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, United Parcel 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 United Parcel will offset losses from the drop in United Parcel's long position.| Loomis Sayles vs. Asg Managed Futures | Loomis Sayles vs. Asg Managed Futures | Loomis Sayles vs. Natixis Oakmark | Loomis Sayles vs. Natixis Oakmark International |
| United Parcel vs. JB Hunt Transport | United Parcel vs. Aquagold International | United Parcel vs. Thrivent High Yield | United Parcel 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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