Correlation Between Black Oak and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Black Oak 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 Black Oak and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Oak Emerging and Legg Mason Partners, you can compare the effects of market volatilities on Black Oak 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 Black Oak with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Oak and Legg Mason.
Diversification Opportunities for Black Oak and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Black and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Black Oak Emerging 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 Black Oak 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 Black Oak Emerging 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 Black Oak i.e., Black Oak and Legg Mason go up and down completely randomly.
Pair Corralation between Black Oak and Legg Mason
Assuming the 90 days horizon Black Oak is expected to generate 35.77 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Black Oak Emerging is 23.23 times less risky than Legg Mason. It trades about 0.04 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 347.00 in Legg Mason Partners on September 5, 2024 and sell it today you would lose (247.00) from holding Legg Mason Partners or give up 71.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
Black Oak Emerging vs. Legg Mason Partners
Performance |
| Timeline |
| Black Oak Emerging |
| Legg Mason Partners |
Black Oak and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Oak and Legg Mason
The main advantage of trading using opposite Black Oak and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Oak 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.| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
| Legg Mason vs. Transamerica Emerging Markets | Legg Mason vs. Shelton Emerging Markets | Legg Mason vs. Black Oak Emerging | Legg Mason vs. Rbc Emerging Markets |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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