Correlation Between Astor Long/short and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Astor Long/short 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 Astor Long/short and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astor Longshort Fund and Legg Mason Partners, you can compare the effects of market volatilities on Astor Long/short 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 Astor Long/short with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astor Long/short and Legg Mason.
Diversification Opportunities for Astor Long/short and Legg Mason
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Astor and Legg is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Astor Longshort Fund 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 Astor Long/short 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 Astor Longshort Fund 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 Astor Long/short i.e., Astor Long/short and Legg Mason go up and down completely randomly.
Pair Corralation between Astor Long/short and Legg Mason
Assuming the 90 days horizon Astor Longshort Fund is expected to generate 3.19 times more return on investment than Legg Mason. However, Astor Long/short is 3.19 times more volatile than Legg Mason Partners. It trades about 0.16 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.13 per unit of risk. If you would invest 1,323 in Astor Longshort Fund on September 3, 2024 and sell it today you would earn a total of 108.00 from holding Astor Longshort Fund or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astor Longshort Fund vs. Legg Mason Partners
Performance |
| Timeline |
| Astor Long/short |
| Legg Mason Partners |
Astor Long/short and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astor Long/short and Legg Mason
The main advantage of trading using opposite Astor Long/short and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astor Long/short 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.| Astor Long/short vs. Fpa Queens Road | Astor Long/short vs. American Century Etf | Astor Long/short vs. Mutual Of America | Astor Long/short vs. Mid Cap Value Profund |
| Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
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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