Correlation Between Artisan Global and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Artisan Global 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 Artisan Global and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Artisan Global Equity and Legg Mason Partners, you can compare the effects of market volatilities on Artisan Global 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 Artisan Global with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Artisan Global and Legg Mason.
Diversification Opportunities for Artisan Global and Legg Mason
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ARTISAN and Legg is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Artisan Global Equity 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 Artisan Global 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 Artisan Global Equity 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 Artisan Global i.e., Artisan Global and Legg Mason go up and down completely randomly.
Pair Corralation between Artisan Global and Legg Mason
Assuming the 90 days horizon Artisan Global is expected to generate 4.62 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Artisan Global Equity is 2.55 times less risky than Legg Mason. It trades about 0.19 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 2,590 in Legg Mason Partners on September 4, 2024 and sell it today you would earn a total of 294.00 from holding Legg Mason Partners or generate 11.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Artisan Global Equity vs. Legg Mason Partners
Performance |
| Timeline |
| Artisan Global Equity |
| Legg Mason Partners |
Artisan Global and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Artisan Global and Legg Mason
The main advantage of trading using opposite Artisan Global and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Artisan Global 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.| Artisan Global vs. Blackrock Conservative Prprdptfinstttnl | Artisan Global vs. Huber Capital Diversified | Artisan Global vs. Harbor Diversified International | Artisan Global vs. Adams Diversified Equity |
| Legg Mason vs. Blackrock Government Bond | Legg Mason vs. Government Securities Fund | Legg Mason vs. Aig Government Money | Legg Mason vs. Us Government Securities |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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