Correlation Between Chase Growth and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Chase Growth 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 Chase Growth and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chase Growth Fund and Legg Mason Partners, you can compare the effects of market volatilities on Chase Growth 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 Chase Growth with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chase Growth and Legg Mason.
Diversification Opportunities for Chase Growth and Legg Mason
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chase and Legg is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chase Growth 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 Chase Growth 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 Chase Growth 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 Chase Growth i.e., Chase Growth and Legg Mason go up and down completely randomly.
Pair Corralation between Chase Growth and Legg Mason
Assuming the 90 days horizon Chase Growth Fund is expected to generate 1.21 times more return on investment than Legg Mason. However, Chase Growth is 1.21 times more volatile than Legg Mason Partners. It trades about 0.12 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.04 per unit of risk. If you would invest 1,208 in Chase Growth Fund on September 12, 2024 and sell it today you would earn a total of 560.00 from holding Chase Growth Fund or generate 46.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chase Growth Fund vs. Legg Mason Partners
Performance |
| Timeline |
| Chase Growth |
| Legg Mason Partners |
Chase Growth and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chase Growth and Legg Mason
The main advantage of trading using opposite Chase Growth and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chase Growth 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.| Chase Growth vs. The Chesapeake Growth | Chase Growth vs. Aston Montag Caldwell | Chase Growth vs. The Jensen Portfolio | Chase Growth vs. Cambiar Opportunity Fund |
| Legg Mason vs. Eip Growth And | Legg Mason vs. Ftfa Franklin Templeton Growth | Legg Mason vs. Chase Growth Fund | Legg Mason vs. Pace Smallmedium Growth |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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