Correlation Between Retirement Living and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Retirement Living 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 Retirement Living and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retirement Living Through and Legg Mason Partners, you can compare the effects of market volatilities on Retirement Living 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 Retirement Living with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retirement Living and Legg Mason.
Diversification Opportunities for Retirement Living and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Retirement and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Retirement Living Through 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 Retirement Living 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 Retirement Living Through 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 Retirement Living i.e., Retirement Living and Legg Mason go up and down completely randomly.
Pair Corralation between Retirement Living and Legg Mason
Assuming the 90 days horizon Retirement Living Through is expected to generate 0.52 times more return on investment than Legg Mason. However, Retirement Living Through is 1.93 times less risky than Legg Mason. It trades about 0.09 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.02 per unit of risk. If you would invest 1,032 in Retirement Living Through on September 12, 2024 and sell it today you would earn a total of 332.00 from holding Retirement Living Through or generate 32.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
Retirement Living Through vs. Legg Mason Partners
Performance |
| Timeline |
| Retirement Living Through |
| Legg Mason Partners |
Retirement Living and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retirement Living and Legg Mason
The main advantage of trading using opposite Retirement Living and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retirement Living 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.| Retirement Living vs. Fidelity Freedom 2035 | Retirement Living vs. HUMANA INC | Retirement Living vs. Barloworld Ltd ADR | Retirement Living vs. Morningstar Unconstrained Allocation |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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