Correlation Between Loomis Sayles and Federated Emerging

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

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

Diversification Opportunities for Loomis Sayles and Federated Emerging

0.96

Correlation Coefficient

Loomis Sayles  Federated Emerging

Almost no diversification

The 3 months correlation between Loomis and Federated is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Loomis Sayles Institutional and Federated Emerging Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Emerging Market 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 Institutional are associated (or correlated) with Federated Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Emerging Market has no effect on the direction of Loomis Sayles i.e., Loomis Sayles and Federated Emerging go up and down completely randomly.

Pair Corralation between Loomis Sayles and Federated Emerging

Assuming the 90 days horizon Loomis Sayles is expected to generate 1.9 times less return on investment than Federated Emerging. But when comparing it to its historical volatility, Loomis Sayles Institutional is 1.24 times less risky than Federated Emerging. It trades about 0.21 of its potential returns per unit of risk. Federated Emerging Market is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  823.00  in Federated Emerging Market on July 22, 2025 and sell it today you would earn a total of  38.00  from holding Federated Emerging Market or generate 4.62% return on investment over 90 days.

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

Loomis Sayles Institutional  vs.  Federated Emerging Market

Loomis Sayles Instit

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Loomis Sayles Institutional are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Loomis Sayles is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Federated Emerging Market

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Emerging Market are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Federated Emerging 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 Federated Emerging

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

The idea behind Loomis Sayles Institutional and Federated Emerging Market 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.