Correlation Between Legg Mason and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Massmutual Select 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 Legg Mason and Massmutual Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Partners and Massmutual Select Diversified, you can compare the effects of market volatilities on Legg Mason and Massmutual Select 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 Legg Mason with a short position of Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Massmutual Select.
Diversification Opportunities for Legg Mason and Massmutual Select
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Massmutual is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Massmutual Select Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select and Legg Mason 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 Legg Mason Partners are associated (or correlated) with Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select has no effect on the direction of Legg Mason i.e., Legg Mason and Massmutual Select go up and down completely randomly.
Pair Corralation between Legg Mason and Massmutual Select
Assuming the 90 days horizon Legg Mason Partners is expected to generate 16.7 times more return on investment than Massmutual Select. However, Legg Mason is 16.7 times more volatile than Massmutual Select Diversified. It trades about 0.04 of its potential returns per unit of risk. Massmutual Select Diversified is currently generating about 0.01 per unit of risk. If you would invest 94.00 in Legg Mason Partners on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Legg Mason Partners or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Legg Mason Partners vs. Massmutual Select Diversified
Performance |
| Timeline |
| Legg Mason Partners |
| Massmutual Select |
Legg Mason and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Massmutual Select
The main advantage of trading using opposite Legg Mason and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Legg Mason vs. Goldman Sachs Real | Legg Mason vs. Deutsche Real Estate | Legg Mason vs. Amg Managers Centersquare | Legg Mason vs. Pender Real Estate |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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