Correlation Between Jp Morgan and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Jp Morgan 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 Jp Morgan and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jp Morgan Smartretirement and Legg Mason Partners, you can compare the effects of market volatilities on Jp Morgan 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 Jp Morgan with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jp Morgan and Legg Mason.
Diversification Opportunities for Jp Morgan and Legg Mason
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between JTSQX and Legg is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Jp Morgan Smartretirement 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 Jp Morgan 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 Jp Morgan Smartretirement 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 Jp Morgan i.e., Jp Morgan and Legg Mason go up and down completely randomly.
Pair Corralation between Jp Morgan and Legg Mason
Assuming the 90 days horizon Jp Morgan Smartretirement is expected to generate 1.72 times more return on investment than Legg Mason. However, Jp Morgan is 1.72 times more volatile than Legg Mason Partners. It trades about 0.06 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.1 per unit of risk. If you would invest 1,890 in Jp Morgan Smartretirement on September 4, 2024 and sell it today you would earn a total of 502.00 from holding Jp Morgan Smartretirement or generate 26.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jp Morgan Smartretirement vs. Legg Mason Partners
Performance |
| Timeline |
| Jp Morgan Smartretirement |
| Legg Mason Partners |
Jp Morgan and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jp Morgan and Legg Mason
The main advantage of trading using opposite Jp Morgan and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jp Morgan 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.| Jp Morgan vs. Jpmorgan Small Cap | Jp Morgan vs. Jpmorgan Mid Cap | Jp Morgan vs. Jpmorgan Smartretirement Blend | Jp Morgan vs. Jpmorgan Preferred And |
| Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |