Correlation Between Guggenheim Diversified and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Guggenheim Diversified 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 Guggenheim Diversified and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Diversified Income and Legg Mason Global, you can compare the effects of market volatilities on Guggenheim Diversified 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 Guggenheim Diversified with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Diversified and Legg Mason.
Diversification Opportunities for Guggenheim Diversified and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Guggenheim and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Diversified Income 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 Guggenheim Diversified 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 Guggenheim Diversified Income 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 Guggenheim Diversified i.e., Guggenheim Diversified and Legg Mason go up and down completely randomly.
Pair Corralation between Guggenheim Diversified and Legg Mason
If you would invest 949.00 in Legg Mason Global on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Legg Mason Global or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Diversified Income vs. Legg Mason Global
Performance |
| Timeline |
| Guggenheim Diversified |
| Legg Mason Global |
Guggenheim Diversified and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Diversified and Legg Mason
The main advantage of trading using opposite Guggenheim Diversified and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Diversified 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.The idea behind Guggenheim Diversified Income and Legg Mason Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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