Correlation Between Kopernik Global and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Kopernik Global 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 Kopernik Global and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kopernik Global All Cap and Legg Mason Global, you can compare the effects of market volatilities on Kopernik Global 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 Kopernik Global with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopernik Global and Legg Mason.
Diversification Opportunities for Kopernik Global and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kopernik and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik Global All Cap and Legg Mason Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Global and Kopernik Global 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 Kopernik Global All Cap 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 Global has no effect on the direction of Kopernik Global i.e., Kopernik Global and Legg Mason go up and down completely randomly.
Pair Corralation between Kopernik Global and Legg Mason
Assuming the 90 days horizon Kopernik Global is expected to generate 1.97 times less return on investment than Legg Mason. In addition to that, Kopernik Global is 2.54 times more volatile than Legg Mason Global. It trades about 0.02 of its total potential returns per unit of risk. Legg Mason Global is currently generating about 0.12 per unit of volatility. If you would invest 876.00 in Legg Mason Global on September 14, 2024 and sell it today you would earn a total of 83.00 from holding Legg Mason Global or generate 9.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kopernik Global All Cap vs. Legg Mason Global
Performance |
| Timeline |
| Kopernik Global All |
| Legg Mason Global |
Kopernik Global and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kopernik Global and Legg Mason
The main advantage of trading using opposite Kopernik Global and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kopernik Global 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.| Kopernik Global vs. Legg Mason Global | Kopernik Global vs. Franklin Mutual Global | Kopernik Global vs. Ab Global Bond | Kopernik Global vs. Siit Global Managed |
| Legg Mason vs. Multimedia Portfolio Multimedia | Legg Mason vs. Rbc Global Equity | Legg Mason vs. Gmo Global Equity | Legg Mason vs. Ms Global Fixed |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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