Correlation Between Gavekal Kl and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Gavekal Kl 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 Gavekal Kl and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gavekal Kl Allocation and Legg Mason Partners, you can compare the effects of market volatilities on Gavekal Kl 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 Gavekal Kl with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gavekal Kl and Legg Mason.
Diversification Opportunities for Gavekal Kl and Legg Mason
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gavekal and Legg is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gavekal Kl Allocation 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 Gavekal Kl 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 Gavekal Kl Allocation 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 Gavekal Kl i.e., Gavekal Kl and Legg Mason go up and down completely randomly.
Pair Corralation between Gavekal Kl and Legg Mason
Assuming the 90 days horizon Gavekal Kl is expected to generate 1.47 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Gavekal Kl Allocation is 1.76 times less risky than Legg Mason. It trades about 0.18 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,974 in Legg Mason Partners on September 4, 2024 and sell it today you would earn a total of 474.00 from holding Legg Mason Partners or generate 24.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 51.42% |
| Values | Daily Returns |
Gavekal Kl Allocation vs. Legg Mason Partners
Performance |
| Timeline |
| Gavekal Kl Allocation |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Legg Mason Partners |
Gavekal Kl and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gavekal Kl and Legg Mason
The main advantage of trading using opposite Gavekal Kl and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gavekal Kl 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.| Gavekal Kl vs. Blrc Sgy Mnp | Gavekal Kl vs. Versatile Bond Portfolio | Gavekal Kl vs. Multisector Bond Sma | Gavekal Kl vs. Bbh Intermediate Municipal |
| Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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