Correlation Between Delaware Healthcare and Loomis Sayles

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

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

Diversification Opportunities for Delaware Healthcare and Loomis Sayles

-0.43

Correlation Coefficient

Delaware Healthcare  Loomis Sayles

Very good diversification

The 3 months correlation between Delaware and Loomis is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Healthcare Fund and Loomis Sayles International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles Intern and Delaware Healthcare 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 Delaware Healthcare Fund 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 Intern has no effect on the direction of Delaware Healthcare i.e., Delaware Healthcare and Loomis Sayles go up and down completely randomly.

Pair Corralation between Delaware Healthcare and Loomis Sayles

Assuming the 90 days horizon Delaware Healthcare Fund is expected to under-perform the Loomis Sayles. In addition to that, Delaware Healthcare is 1.78 times more volatile than Loomis Sayles International. It trades about -0.17 of its total potential returns per unit of risk. Loomis Sayles International is currently generating about 0.11 per unit of volatility. If you would invest  1,034  in Loomis Sayles International on September 12, 2024 and sell it today you would earn a total of  67.00  from holding Loomis Sayles International or generate 6.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Delaware Healthcare Fund  vs.  Loomis Sayles International

Delaware Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delaware Healthcare Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Loomis Sayles Intern

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles International are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Loomis Sayles may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Delaware Healthcare and Loomis Sayles

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

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.