Correlation Between Gmo Global and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Gmo Global 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 Gmo Global and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Global Equity and Legg Mason Global, you can compare the effects of market volatilities on Gmo Global 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 Gmo Global with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Global and Legg Mason.
Diversification Opportunities for Gmo Global and Legg Mason
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gmo and Legg is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Global Equity 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 Gmo Global 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 Gmo Global Equity 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 Gmo Global i.e., Gmo Global and Legg Mason go up and down completely randomly.
Pair Corralation between Gmo Global and Legg Mason
Assuming the 90 days horizon Gmo Global Equity is expected to generate 2.11 times more return on investment than Legg Mason. However, Gmo Global is 2.11 times more volatile than Legg Mason Global. It trades about 0.22 of its potential returns per unit of risk. Legg Mason Global is currently generating about 0.29 per unit of risk. If you would invest 2,983 in Gmo Global Equity on September 14, 2024 and sell it today you would earn a total of 56.00 from holding Gmo Global Equity or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Global Equity vs. Legg Mason Global
Performance |
| Timeline |
| Gmo Global Equity |
| Legg Mason Global |
Gmo Global and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Global and Legg Mason
The main advantage of trading using opposite Gmo Global and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Global 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.| Gmo Global vs. Fidelity Sai Inflationfocused | Gmo Global vs. Blackrock Inflation Protected | Gmo Global vs. Lord Abbett Inflation | Gmo Global vs. Simt Multi Asset Inflation |
| Legg Mason vs. Multimedia Portfolio Multimedia | Legg Mason vs. Rbc Global Equity | Legg Mason vs. Gmo Global Equity | Legg Mason vs. Ms Global Fixed |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |