Correlation Between Legal General and Legal General
Can any of the company-specific risk be diversified away by investing in both Legal General and Legal General 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 Legal General and Legal General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legal General UCITS and Legal General UCITS, you can compare the effects of market volatilities on Legal General and Legal General 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 Legal General with a short position of Legal General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legal General and Legal General.
Diversification Opportunities for Legal General and Legal General
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legal and Legal is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Legal General UCITS and Legal General UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General UCITS and Legal General 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 Legal General UCITS are associated (or correlated) with Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General UCITS has no effect on the direction of Legal General i.e., Legal General and Legal General go up and down completely randomly.
Pair Corralation between Legal General and Legal General
Assuming the 90 days trading horizon Legal General is expected to generate 5.27 times less return on investment than Legal General. In addition to that, Legal General is 1.26 times more volatile than Legal General UCITS. It trades about 0.01 of its total potential returns per unit of risk. Legal General UCITS is currently generating about 0.05 per unit of volatility. If you would invest 53,205 in Legal General UCITS on September 2, 2024 and sell it today you would earn a total of 13,195 from holding Legal General UCITS or generate 24.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legal General UCITS vs. Legal General UCITS
Performance |
| Timeline |
| Legal General UCITS |
| Legal General UCITS |
Legal General and Legal General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legal General and Legal General
The main advantage of trading using opposite Legal General and Legal General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legal General position performs unexpectedly, Legal General 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 Legal General will offset losses from the drop in Legal General's long position.| Legal General vs. Vanguard FTSE Developed | Legal General vs. Leverage Shares 2x | Legal General vs. Amundi Index Solutions | Legal General vs. Amundi Index Solutions |
| Legal General vs. Vanguard FTSE Developed | Legal General vs. Leverage Shares 2x | Legal General vs. Amundi Index Solutions | Legal General vs. Amundi Index Solutions |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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