Correlation Between Acm Dynamic and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Acm Dynamic 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 Acm Dynamic and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acm Dynamic Opportunity and Legg Mason Bw, you can compare the effects of market volatilities on Acm Dynamic 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 Acm Dynamic with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acm Dynamic and Legg Mason.
Diversification Opportunities for Acm Dynamic and Legg Mason
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Acm and Legg is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Acm Dynamic Opportunity 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 Acm Dynamic 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 Acm Dynamic Opportunity 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 Acm Dynamic i.e., Acm Dynamic and Legg Mason go up and down completely randomly.
Pair Corralation between Acm Dynamic and Legg Mason
Assuming the 90 days horizon Acm Dynamic Opportunity is expected to generate 1.23 times more return on investment than Legg Mason. However, Acm Dynamic is 1.23 times more volatile than Legg Mason Bw. It trades about 0.19 of its potential returns per unit of risk. Legg Mason Bw is currently generating about -0.25 per unit of risk. If you would invest 2,065 in Acm Dynamic Opportunity on September 12, 2024 and sell it today you would earn a total of 139.00 from holding Acm Dynamic Opportunity or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Acm Dynamic Opportunity vs. Legg Mason Bw
Performance |
| Timeline |
| Acm Dynamic Opportunity |
| Legg Mason Bw |
Acm Dynamic and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acm Dynamic and Legg Mason
The main advantage of trading using opposite Acm Dynamic and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acm Dynamic 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.| Acm Dynamic vs. Jennison Natural Resources | Acm Dynamic vs. Invesco Energy Fund | Acm Dynamic vs. Adams Natural Resources | Acm Dynamic vs. Energy Basic Materials |
| Legg Mason vs. Ab Small Cap | Legg Mason vs. Champlain Small | Legg Mason vs. Aqr Small Cap | Legg Mason vs. Touchstone Small Cap |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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