Correlation Between Harbor Diversified and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Harbor 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 Harbor 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 Harbor Diversified International and Legg Mason Bw, you can compare the effects of market volatilities on Harbor 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 Harbor Diversified with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harbor Diversified and Legg Mason.
Diversification Opportunities for Harbor Diversified and Legg Mason
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Harbor and Legg is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Harbor Diversified Internation and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw and Harbor 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 Harbor Diversified International 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 Bw has no effect on the direction of Harbor Diversified i.e., Harbor Diversified and Legg Mason go up and down completely randomly.
Pair Corralation between Harbor Diversified and Legg Mason
Assuming the 90 days horizon Harbor Diversified International is expected to generate 0.99 times more return on investment than Legg Mason. However, Harbor Diversified International is 1.01 times less risky than Legg Mason. It trades about 0.26 of its potential returns per unit of risk. Legg Mason Bw is currently generating about 0.01 per unit of risk. If you would invest 1,233 in Harbor Diversified International on December 4, 2024 and sell it today you would earn a total of 37.00 from holding Harbor Diversified International or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Harbor Diversified Internation vs. Legg Mason Bw
Performance |
| Timeline |
| Harbor Diversified |
| Legg Mason Bw |
Harbor Diversified and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Harbor Diversified and Legg Mason
The main advantage of trading using opposite Harbor Diversified and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harbor 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.| Harbor Diversified vs. Health Care Ultrasector | Harbor Diversified vs. Eventide Healthcare Life | Harbor Diversified vs. Baron Health Care | Harbor Diversified vs. Delaware Healthcare Fund |
| Legg Mason vs. Tekla Healthcare Investors | Legg Mason vs. Highland Longshort Healthcare | Legg Mason vs. Blackrock Health Sciences | Legg Mason vs. Eventide Healthcare Life |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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