Correlation Between Jpmorgan Equity and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Jpmorgan Equity 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 Equity 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 Equity Fund and Legg Mason Partners, you can compare the effects of market volatilities on Jpmorgan Equity 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 Equity with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Equity and Legg Mason.
Diversification Opportunities for Jpmorgan Equity and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Jpmorgan and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Equity Fund 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 Equity 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 Equity Fund 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 Equity i.e., Jpmorgan Equity and Legg Mason go up and down completely randomly.
Pair Corralation between Jpmorgan Equity and Legg Mason
Assuming the 90 days horizon Jpmorgan Equity Fund is expected to generate 6.98 times more return on investment than Legg Mason. However, Jpmorgan Equity is 6.98 times more volatile than Legg Mason Partners. It trades about 0.11 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.13 per unit of risk. If you would invest 2,453 in Jpmorgan Equity Fund on September 12, 2024 and sell it today you would earn a total of 295.00 from holding Jpmorgan Equity Fund or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jpmorgan Equity Fund vs. Legg Mason Partners
Performance |
| Timeline |
| Jpmorgan Equity |
| Legg Mason Partners |
Jpmorgan Equity and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan Equity and Legg Mason
The main advantage of trading using opposite Jpmorgan Equity and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Equity 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 Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 | Jpmorgan Equity vs. Jpmorgan Smartretirement 2035 |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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