Correlation Between Jpmorgan Strategic and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Strategic 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 Strategic 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 Strategic Income and Legg Mason Bw, you can compare the effects of market volatilities on Jpmorgan Strategic 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 Strategic with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Strategic and Legg Mason.
Diversification Opportunities for Jpmorgan Strategic and Legg Mason
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Jpmorgan and Legg is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Strategic Income 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 Jpmorgan Strategic 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 Strategic Income 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 Jpmorgan Strategic i.e., Jpmorgan Strategic and Legg Mason go up and down completely randomly.
Pair Corralation between Jpmorgan Strategic and Legg Mason
Assuming the 90 days horizon Jpmorgan Strategic Income is expected to generate 0.23 times more return on investment than Legg Mason. However, Jpmorgan Strategic Income is 4.3 times less risky than Legg Mason. It trades about 0.36 of its potential returns per unit of risk. Legg Mason Bw is currently generating about 0.03 per unit of risk. If you would invest 1,033 in Jpmorgan Strategic Income on August 24, 2024 and sell it today you would earn a total of 115.00 from holding Jpmorgan Strategic Income or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Strategic Income vs. Legg Mason Bw
Performance |
| Timeline |
| Jpmorgan Strategic Income |
| Legg Mason Bw |
Jpmorgan Strategic and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Strategic and Legg Mason
The main advantage of trading using opposite Jpmorgan Strategic and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Strategic 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 Strategic vs. Advent Claymore Convertible | Jpmorgan Strategic vs. Franklin Vertible Securities | Jpmorgan Strategic vs. Putnam Convertible Incm Gwth | Jpmorgan Strategic vs. Virtus Convertible |
| Legg Mason vs. Blackrock Strategic Income | Legg Mason vs. Blackrock Strategic Opps | Legg Mason vs. Blackrock Strategic Opps | Legg Mason vs. Jpmorgan Strategic Income |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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