Correlation Between Ab Bond and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Legg Mason 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 Ab Bond and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Legg Mason Bw, you can compare the effects of market volatilities on Ab Bond and Legg Mason 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 Ab Bond with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Legg Mason.
Diversification Opportunities for Ab Bond and Legg Mason
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ABNCX and Legg is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Bw has no effect on the direction of Ab Bond i.e., Ab Bond and Legg Mason go up and down completely randomly.
Pair Corralation between Ab Bond and Legg Mason
Assuming the 90 days horizon Ab Bond Inflation is expected to generate 0.22 times more return on investment than Legg Mason. However, Ab Bond Inflation is 4.5 times less risky than Legg Mason. It trades about 0.15 of its potential returns per unit of risk. Legg Mason Bw is currently generating about -0.09 per unit of risk. If you would invest 1,000.00 in Ab Bond Inflation on September 13, 2024 and sell it today you would earn a total of 4.00 from holding Ab Bond Inflation or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Bond Inflation vs. Legg Mason Bw
Performance |
| Timeline |
| Ab Bond Inflation |
| Legg Mason Bw |
Ab Bond and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Legg Mason
The main advantage of trading using opposite Ab Bond and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Minnesota Portfolio |
| Legg Mason vs. Small Cap Stock | Legg Mason vs. Century Small Cap | Legg Mason vs. Omni Small Cap Value | Legg Mason vs. Versatile Bond Portfolio |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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