Correlation Between Loomis Sayles and HUMANA

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

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

Diversification Opportunities for Loomis Sayles and HUMANA

-0.7

Correlation Coefficient

Loomis Sayles  HUMANA

Excellent diversification

The 3 months correlation between Loomis and HUMANA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Growth and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 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 Growth are associated (or correlated) with HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and HUMANA go up and down completely randomly.

Pair Corralation between Loomis Sayles and HUMANA

Assuming the 90 days horizon Loomis Sayles Growth is expected to generate 1.22 times more return on investment than HUMANA. However, Loomis Sayles is 1.22 times more volatile than HUMANA INC. It trades about 0.24 of its potential returns per unit of risk. HUMANA INC is currently generating about -0.15 per unit of risk. If you would invest  2,671  in Loomis Sayles Growth on September 2, 2024 and sell it today you would earn a total of  430.00  from holding Loomis Sayles Growth or generate 16.1% return on investment over 90 days.

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

Loomis Sayles Growth  vs.  HUMANA INC

Loomis Sayles Growth

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Growth are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Loomis Sayles showed solid returns over the last few months and may actually be approaching a breakup point.

HUMANA INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUMANA INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUMANA INC investors.

Pair Trading with Loomis Sayles and HUMANA

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

The idea behind Loomis Sayles Growth and HUMANA INC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.