Correlation Between Loomis Sayles and Neuberger Berman

Can any of the company-specific risk be diversified away by investing in both Loomis Sayles and Neuberger Berman 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 Neuberger Berman 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 Neuberger Berman Large, you can compare the effects of market volatilities on Loomis Sayles and Neuberger Berman 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 Neuberger Berman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loomis Sayles and Neuberger Berman.

Diversification Opportunities for Loomis Sayles and Neuberger Berman

0.77

Correlation Coefficient

Loomis Sayles  Neuberger Berman

Poor diversification

The 3 months correlation between Loomis and Neuberger is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Small and Neuberger Berman Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuberger Berman Large 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 Neuberger Berman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuberger Berman Large has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Neuberger Berman go up and down completely randomly.

Pair Corralation between Loomis Sayles and Neuberger Berman

Assuming the 90 days horizon Loomis Sayles Small is expected to generate 2.06 times more return on investment than Neuberger Berman. However, Loomis Sayles is 2.06 times more volatile than Neuberger Berman Large. It trades about 0.11 of its potential returns per unit of risk. Neuberger Berman Large is currently generating about 0.04 per unit of risk. If you would invest  2,326  in Loomis Sayles Small on September 13, 2024 and sell it today you would earn a total of  180.00  from holding Loomis Sayles Small or generate 7.74% return on investment over 90 days.

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

Loomis Sayles Small  vs.  Neuberger Berman Large

Loomis Sayles Small

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Small are ranked lower than 8 (%) 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.

Neuberger Berman Large

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Neuberger Berman Large are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Neuberger Berman 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 Neuberger Berman

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

The idea behind Loomis Sayles Small and Neuberger Berman Large 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.