Correlation Between Goldman Sachs and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Mlp and Legg Mason Global, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Legg Mason.
Diversification Opportunities for Goldman Sachs and Legg Mason
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Legg is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Mlp 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 Goldman Sachs 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 Goldman Sachs Mlp 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 Goldman Sachs i.e., Goldman Sachs and Legg Mason go up and down completely randomly.
Pair Corralation between Goldman Sachs and Legg Mason
Assuming the 90 days horizon Goldman Sachs Mlp is expected to generate 5.28 times more return on investment than Legg Mason. However, Goldman Sachs is 5.28 times more volatile than Legg Mason Global. It trades about 0.34 of its potential returns per unit of risk. Legg Mason Global is currently generating about 0.28 per unit of risk. If you would invest 3,654 in Goldman Sachs Mlp on November 3, 2024 and sell it today you would earn a total of 280.00 from holding Goldman Sachs Mlp or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Goldman Sachs Mlp vs. Legg Mason Global
Performance |
| Timeline |
| Goldman Sachs Mlp |
| Legg Mason Global |
Goldman Sachs and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Legg Mason
The main advantage of trading using opposite Goldman Sachs and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Rbc Global Equity | Goldman Sachs vs. Rational Strategic Allocation | Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Morningstar Global Income |
| Legg Mason vs. Lord Abbett Diversified | Legg Mason vs. Lord Abbett Diversified | Legg Mason vs. Fulcrum Diversified Absolute | Legg Mason vs. Wells Fargo Diversified |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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