Correlation Between The Hartford and Legg Mason
Can any of the company-specific risk be diversified away by investing in both The Hartford 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 The Hartford and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Small and Legg Mason Partners, you can compare the effects of market volatilities on The Hartford 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 The Hartford with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Legg Mason.
Diversification Opportunities for The Hartford and Legg Mason
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between The and Legg is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Small and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners and The Hartford 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 The Hartford Small 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 Partners has no effect on the direction of The Hartford i.e., The Hartford and Legg Mason go up and down completely randomly.
Pair Corralation between The Hartford and Legg Mason
Assuming the 90 days horizon The Hartford is expected to generate 1.2 times less return on investment than Legg Mason. But when comparing it to its historical volatility, The Hartford Small is 1.09 times less risky than Legg Mason. It trades about 0.33 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 2,570 in Legg Mason Partners on September 1, 2024 and sell it today you would earn a total of 313.00 from holding Legg Mason Partners or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Small vs. Legg Mason Partners
Performance |
| Timeline |
| Hartford Small |
| Legg Mason Partners |
The Hartford and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Legg Mason
The main advantage of trading using opposite The Hartford and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford 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 Hartford vs. Ab All Market | The Hartford vs. Ep Emerging Markets | The Hartford vs. Artisan Emerging Markets | The Hartford vs. Origin Emerging Markets |
| Legg Mason vs. Transamerica Emerging Markets | Legg Mason vs. Angel Oak Multi Strategy | Legg Mason vs. Shelton Emerging Markets | Legg Mason vs. Eagle Mlp Strategy |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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