Correlation Between Jpmorgan Emerging and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Emerging 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 Jpmorgan Emerging and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan Emerging Markets and Legg Mason Partners, you can compare the effects of market volatilities on Jpmorgan Emerging 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 Jpmorgan Emerging with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Emerging and Legg Mason.
Diversification Opportunities for Jpmorgan Emerging and Legg Mason
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jpmorgan and Legg is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Emerging Markets 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 Jpmorgan Emerging 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 Jpmorgan Emerging Markets 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 Jpmorgan Emerging i.e., Jpmorgan Emerging and Legg Mason go up and down completely randomly.
Pair Corralation between Jpmorgan Emerging and Legg Mason
Assuming the 90 days horizon Jpmorgan Emerging Markets is expected to generate 1.59 times more return on investment than Legg Mason. However, Jpmorgan Emerging is 1.59 times more volatile than Legg Mason Partners. It trades about 0.13 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.05 per unit of risk. If you would invest 2,946 in Jpmorgan Emerging Markets on December 3, 2024 and sell it today you would earn a total of 66.00 from holding Jpmorgan Emerging Markets or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Emerging Markets vs. Legg Mason Partners
Performance |
| Timeline |
| Jpmorgan Emerging Markets |
| Legg Mason Partners |
Jpmorgan Emerging and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Emerging and Legg Mason
The main advantage of trading using opposite Jpmorgan Emerging and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Emerging 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.| Jpmorgan Emerging vs. Us Government Securities | Jpmorgan Emerging vs. Federated Government Income | Jpmorgan Emerging vs. John Hancock Government | Jpmorgan Emerging vs. Virtus Seix Government |
| Legg Mason vs. Hennessy Technology Fund | Legg Mason vs. Pgim Jennison Technology | Legg Mason vs. T Rowe Price | Legg Mason 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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