Correlation Between Fidelity Convertible and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Fidelity Convertible 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 Fidelity Convertible and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Vertible Securities and Legg Mason Global, you can compare the effects of market volatilities on Fidelity Convertible 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 Fidelity Convertible with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Convertible and Legg Mason.
Diversification Opportunities for Fidelity Convertible and Legg Mason
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fidelity and Legg is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Vertible Securities and Legg Mason Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Global and Fidelity Convertible 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 Fidelity Vertible Securities 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 Global has no effect on the direction of Fidelity Convertible i.e., Fidelity Convertible and Legg Mason go up and down completely randomly.
Pair Corralation between Fidelity Convertible and Legg Mason
Assuming the 90 days horizon Fidelity Vertible Securities is expected to generate 1.62 times more return on investment than Legg Mason. However, Fidelity Convertible is 1.62 times more volatile than Legg Mason Global. It trades about 0.05 of its potential returns per unit of risk. Legg Mason Global is currently generating about 0.04 per unit of risk. If you would invest 2,951 in Fidelity Vertible Securities on October 14, 2024 and sell it today you would earn a total of 487.00 from holding Fidelity Vertible Securities or generate 16.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity Vertible Securities vs. Legg Mason Global
Performance |
| Timeline |
| Fidelity Convertible |
| Legg Mason Global |
Fidelity Convertible and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Convertible and Legg Mason
The main advantage of trading using opposite Fidelity Convertible and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Convertible 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.| Fidelity Convertible vs. Legg Mason Global | Fidelity Convertible vs. Artisan Global Opportunities | Fidelity Convertible vs. Commonwealth Global Fund | Fidelity Convertible vs. Asg Global Alternatives |
| Legg Mason vs. Ridgeworth Seix Government | Legg Mason vs. Intermediate Government Bond | Legg Mason vs. Dreyfus Government Cash | Legg Mason vs. Franklin Adjustable Government |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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