Correlation Between Loomis Sayles and Lazard Small

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

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

Diversification Opportunities for Loomis Sayles and Lazard Small

0.95

Correlation Coefficient

Loomis Sayles  Lazard Small

Almost no diversification

The 3 months correlation between Loomis and Lazard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Small and Lazard Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard Small Mid 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 Small are associated (or correlated) with Lazard Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard Small Mid has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Lazard Small go up and down completely randomly.

Pair Corralation between Loomis Sayles and Lazard Small

Assuming the 90 days horizon Loomis Sayles is expected to generate 1.98 times less return on investment than Lazard Small. In addition to that, Loomis Sayles is 1.26 times more volatile than Lazard Small Mid Cap. It trades about 0.02 of its total potential returns per unit of risk. Lazard Small Mid Cap is currently generating about 0.04 per unit of volatility. If you would invest  1,224  in Lazard Small Mid Cap on September 12, 2024 and sell it today you would earn a total of  176.00  from holding Lazard Small Mid Cap or generate 14.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.7%
Values	Daily Returns

Loomis Sayles Small  vs.  Lazard Small Mid Cap

Loomis Sayles Small

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Small are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Loomis Sayles may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lazard Small Mid

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lazard Small Mid Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Lazard Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Loomis Sayles and Lazard Small

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

The idea behind Loomis Sayles Small and Lazard Small Mid Cap 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.