Correlation Between Loomis Sayles and Aristotle International

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

By analyzing existing cross correlation between Loomis Sayles Inflation and Aristotle International Equity, you can compare the effects of market volatilities on Loomis Sayles and Aristotle International 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 Aristotle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Aristotle International.

Diversification Opportunities for Loomis Sayles and Aristotle International

0.83

Correlation Coefficient

Loomis Sayles  Aristotle International

Very poor diversification

The 3 months correlation between Loomis and Aristotle is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Inflation and Aristotle International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle International 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 Inflation are associated (or correlated) with Aristotle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle International has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Aristotle International go up and down completely randomly.

Pair Corralation between Loomis Sayles and Aristotle International

Assuming the 90 days horizon Loomis Sayles Inflation is expected to generate 0.35 times more return on investment than Aristotle International. However, Loomis Sayles Inflation is 2.85 times less risky than Aristotle International. It trades about -0.14 of its potential returns per unit of risk. Aristotle International Equity is currently generating about -0.11 per unit of risk. If you would invest  985.00  in Loomis Sayles Inflation on September 19, 2024 and sell it today you would lose (24.00) from holding Loomis Sayles Inflation or give up 2.44% of portfolio value over 90 days.

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

Loomis Sayles Inflation  vs.  Aristotle International Equity

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.

Aristotle International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Loomis Sayles and Aristotle International

The main advantage of trading using opposite Loomis Sayles and Aristotle International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loomis Sayles position performs unexpectedly, Aristotle International 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 Aristotle International will offset losses from the drop in Aristotle International's long position.

The idea behind Loomis Sayles Inflation and Aristotle International Equity 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.