Correlation Between Legg Mason and Barings Active
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Barings Active 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 Legg Mason and Barings Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Bw and Barings Active Short, you can compare the effects of market volatilities on Legg Mason and Barings Active 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 Legg Mason with a short position of Barings Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Barings Active.
Diversification Opportunities for Legg Mason and Barings Active
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legg and Barings is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Barings Active Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Active Short and Legg Mason 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 Legg Mason Bw are associated (or correlated) with Barings Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Active Short has no effect on the direction of Legg Mason i.e., Legg Mason and Barings Active go up and down completely randomly.
Pair Corralation between Legg Mason and Barings Active
Assuming the 90 days horizon Legg Mason is expected to generate 8.89 times less return on investment than Barings Active. In addition to that, Legg Mason is 4.21 times more volatile than Barings Active Short. It trades about 0.01 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.23 per unit of volatility. If you would invest 855.00 in Barings Active Short on September 4, 2024 and sell it today you would earn a total of 70.00 from holding Barings Active Short or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Barings Active Short
Performance |
| Timeline |
| Legg Mason Bw |
| Barings Active Short |
Legg Mason and Barings Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Barings Active
The main advantage of trading using opposite Legg Mason and Barings Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Barings Active 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 Barings Active will offset losses from the drop in Barings Active's long position.| Legg Mason vs. Acm Dynamic Opportunity | Legg Mason vs. Volumetric Fund Volumetric | Legg Mason vs. Arrow Managed Futures | Legg Mason vs. Balanced Fund Investor |
| Barings Active vs. Tiaa Cref Smallmid Cap Equity | Barings Active vs. Small Cap Stock | Barings Active vs. The Gabelli Small | Barings Active vs. T Rowe Price |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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