Correlation Between Wilmington Intermediate and Loomis Sayles

Can any of the company-specific risk be diversified away by investing in both Wilmington Intermediate 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 Wilmington Intermediate and Loomis Sayles into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wilmington Intermediate Term Bond and Loomis Sayles Inflation, you can compare the effects of market volatilities on Wilmington Intermediate 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 Wilmington Intermediate with a short position of Loomis Sayles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Intermediate and Loomis Sayles.

Diversification Opportunities for Wilmington Intermediate and Loomis Sayles

0.8

Correlation Coefficient

Wilmington Intermediate  Loomis Sayles

Very poor diversification

The 3 months correlation between Wilmington and Loomis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Intermediate Term B and Loomis Sayles Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Inflation and Wilmington Intermediate 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 Wilmington Intermediate Term Bond 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 Inflation has no effect on the direction of Wilmington Intermediate i.e., Wilmington Intermediate and Loomis Sayles go up and down completely randomly.

Pair Corralation between Wilmington Intermediate and Loomis Sayles

Assuming the 90 days horizon Wilmington Intermediate Term Bond is expected to under-perform the Loomis Sayles. In addition to that, Wilmington Intermediate is 2.86 times more volatile than Loomis Sayles Inflation. It trades about -0.11 of its total potential returns per unit of risk. Loomis Sayles Inflation is currently generating about -0.14 per unit of volatility. If you would invest  983.00  in Loomis Sayles Inflation on September 20, 2024 and sell it today you would lose (23.00) from holding Loomis Sayles Inflation or give up 2.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Wilmington Intermediate Term B  vs.  Loomis Sayles Inflation

Wilmington Intermediate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmington Intermediate Term Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Wilmington Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Loomis Sayles Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loomis Sayles Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Loomis Sayles is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Wilmington Intermediate and Loomis Sayles

The main advantage of trading using opposite Wilmington Intermediate and Loomis Sayles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Intermediate 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.

The idea behind Wilmington Intermediate Term Bond and Loomis Sayles Inflation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.