Correlation Between Voya Index and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Voya Index 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 Voya Index and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Index Plus and Legg Mason Partners, you can compare the effects of market volatilities on Voya Index 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 Voya Index with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Index and Legg Mason.
Diversification Opportunities for Voya Index and Legg Mason
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Voya and Legg is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Voya Index Plus 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 Voya Index 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 Voya Index Plus 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 Voya Index i.e., Voya Index and Legg Mason go up and down completely randomly.
Pair Corralation between Voya Index and Legg Mason
Assuming the 90 days horizon Voya Index is expected to generate 1.17 times less return on investment than Legg Mason. In addition to that, Voya Index is 1.08 times more volatile than Legg Mason Partners. It trades about 0.18 of its total potential returns per unit of risk. Legg Mason Partners is currently generating about 0.23 per unit of volatility. If you would invest 2,556 in Legg Mason Partners on September 3, 2024 and sell it today you would earn a total of 327.00 from holding Legg Mason Partners or generate 12.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Index Plus vs. Legg Mason Partners
Performance |
| Timeline |
| Voya Index Plus |
| Legg Mason Partners |
Voya Index and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Index and Legg Mason
The main advantage of trading using opposite Voya Index and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Index 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.| Voya Index vs. Vanguard Information Technology | Voya Index vs. Fidelity Advisor Technology | Voya Index vs. Allianzgi Technology Fund | Voya Index vs. Global Technology Portfolio |
| Legg Mason vs. Hennessy Nerstone Mid | Legg Mason vs. Fpa Queens Road | Legg Mason vs. American Century Etf | Legg Mason vs. Columbia Small Cap |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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