Correlation Between Clarion Partners and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Clarion Partners 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 Clarion Partners and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clarion Partners Real and Legg Mason Partners, you can compare the effects of market volatilities on Clarion Partners 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 Clarion Partners with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clarion Partners and Legg Mason.
Diversification Opportunities for Clarion Partners and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clarion and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Clarion Partners Real 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 Clarion Partners 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 Clarion Partners Real 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 Clarion Partners i.e., Clarion Partners and Legg Mason go up and down completely randomly.
Pair Corralation between Clarion Partners and Legg Mason
Assuming the 90 days horizon Clarion Partners is expected to generate 3.21 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Clarion Partners Real is 13.62 times less risky than Legg Mason. It trades about 0.08 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Legg Mason Partners on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Legg Mason Partners or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
Clarion Partners Real vs. Legg Mason Partners
Performance |
| Timeline |
| Clarion Partners Real |
| Legg Mason Partners |
Clarion Partners and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clarion Partners and Legg Mason
The main advantage of trading using opposite Clarion Partners and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarion Partners 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.| Clarion Partners vs. Fidelity Advisor Financial | Clarion Partners vs. Mesirow Financial Small | Clarion Partners vs. Icon Financial Fund | Clarion Partners vs. Vanguard Financials Index |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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