Correlation Between IShares Core and Legg Mason
Can any of the company-specific risk be diversified away by investing in both IShares Core 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 IShares Core and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core Dividend and Legg Mason Low, you can compare the effects of market volatilities on IShares Core 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 IShares Core with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Legg Mason.
Diversification Opportunities for IShares Core and Legg Mason
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Legg is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core Dividend and Legg Mason Low in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Low and IShares Core 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 iShares Core Dividend 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 Low has no effect on the direction of IShares Core i.e., IShares Core and Legg Mason go up and down completely randomly.
Pair Corralation between IShares Core and Legg Mason
Given the investment horizon of 90 days iShares Core Dividend is expected to generate 0.88 times more return on investment than Legg Mason. However, iShares Core Dividend is 1.14 times less risky than Legg Mason. It trades about 0.1 of its potential returns per unit of risk. Legg Mason Low is currently generating about 0.05 per unit of risk. If you would invest 4,871 in iShares Core Dividend on September 1, 2024 and sell it today you would earn a total of 1,623 from holding iShares Core Dividend or generate 33.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core Dividend vs. Legg Mason Low
Performance |
| Timeline |
| iShares Core Dividend |
| Legg Mason Low |
IShares Core and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Legg Mason
The main advantage of trading using opposite IShares Core and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core 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.| IShares Core vs. iShares Core High | IShares Core vs. Schwab Dividend Equity | IShares Core vs. ProShares SP 500 | IShares Core vs. Invesco SP 500 |
| Legg Mason vs. iShares Core SP | Legg Mason vs. iShares Core MSCI | Legg Mason vs. iShares Broad USD | Legg Mason vs. iShares Core SP |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |