Correlation Between Cambiar Opportunity and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Cambiar Opportunity 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 Cambiar Opportunity and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambiar Opportunity Fund and Legg Mason Partners, you can compare the effects of market volatilities on Cambiar Opportunity 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 Cambiar Opportunity with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambiar Opportunity and Legg Mason.
Diversification Opportunities for Cambiar Opportunity and Legg Mason
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cambiar and Legg is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Cambiar Opportunity 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 Cambiar Opportunity 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 Cambiar Opportunity 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 Cambiar Opportunity i.e., Cambiar Opportunity and Legg Mason go up and down completely randomly.
Pair Corralation between Cambiar Opportunity and Legg Mason
Assuming the 90 days horizon Cambiar Opportunity is expected to generate 1.45 times less return on investment than Legg Mason. In addition to that, Cambiar Opportunity is 1.13 times more volatile than Legg Mason Partners. It trades about 0.06 of its total potential returns per unit of risk. Legg Mason Partners is currently generating about 0.1 per unit of volatility. If you would invest 1,171 in Legg Mason Partners on September 3, 2024 and sell it today you would earn a total of 451.00 from holding Legg Mason Partners or generate 38.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambiar Opportunity Fund vs. Legg Mason Partners
Performance |
| Timeline |
| Cambiar Opportunity |
| Legg Mason Partners |
Cambiar Opportunity and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambiar Opportunity and Legg Mason
The main advantage of trading using opposite Cambiar Opportunity and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambiar Opportunity 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.| Cambiar Opportunity vs. Mondrian Emerging Markets | Cambiar Opportunity vs. Transamerica Emerging Markets | Cambiar Opportunity vs. Dodge Cox Emerging | Cambiar Opportunity vs. The Emerging Markets |
| Legg Mason vs. Avantis Large Cap | Legg Mason vs. Qs Large Cap | Legg Mason vs. Americafirst Large Cap | Legg Mason vs. Dana Large 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.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |