Correlation Between Invesco High and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Invesco High 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 Invesco High and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco High Yield and Legg Mason Partners, you can compare the effects of market volatilities on Invesco High 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 Invesco High with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and Legg Mason.
Diversification Opportunities for Invesco High and Legg Mason
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Invesco and Legg is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Yield and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners and Invesco High 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 Invesco High Yield 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 Partners has no effect on the direction of Invesco High i.e., Invesco High and Legg Mason go up and down completely randomly.
Pair Corralation between Invesco High and Legg Mason
Assuming the 90 days horizon Invesco High Yield is expected to generate 0.08 times more return on investment than Legg Mason. However, Invesco High Yield is 12.08 times less risky than Legg Mason. It trades about 0.45 of its potential returns per unit of risk. Legg Mason Partners is currently generating about -0.24 per unit of risk. If you would invest 858.00 in Invesco High Yield on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Invesco High Yield or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco High Yield vs. Legg Mason Partners
Performance |
| Timeline |
| Invesco High Yield |
| Legg Mason Partners |
Invesco High and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and Legg Mason
The main advantage of trading using opposite Invesco High and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High 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.| Invesco High vs. T Rowe Price | Invesco High vs. Volumetric Fund Volumetric | Invesco High vs. Auer Growth Fund | Invesco High vs. Balanced Fund Investor |
| Legg Mason vs. Eip Growth And | Legg Mason vs. Ftfa Franklin Templeton Growth | Legg Mason vs. Chase Growth Fund | Legg Mason vs. Pace Smallmedium Growth |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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