Correlation Between Legg Mason and Prudential Qma
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Prudential Qma 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 Prudential Qma 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 Prudential Qma Strategic, you can compare the effects of market volatilities on Legg Mason and Prudential Qma 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 Prudential Qma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Prudential Qma.
Diversification Opportunities for Legg Mason and Prudential Qma
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Prudential Qma Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Qma Strategic 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 Prudential Qma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Qma Strategic has no effect on the direction of Legg Mason i.e., Legg Mason and Prudential Qma go up and down completely randomly.
Pair Corralation between Legg Mason and Prudential Qma
Assuming the 90 days horizon Legg Mason Partners is expected to generate 34.41 times more return on investment than Prudential Qma. However, Legg Mason is 34.41 times more volatile than Prudential Qma Strategic. It trades about 0.06 of its potential returns per unit of risk. Prudential Qma Strategic is currently generating about 0.05 per unit of risk. If you would invest 377.00 in Legg Mason Partners on September 12, 2024 and sell it today you would lose (277.00) from holding Legg Mason Partners or give up 73.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Legg Mason Partners vs. Prudential Qma Strategic
Performance |
| Timeline |
| Legg Mason Partners |
| Prudential Qma Strategic |
Legg Mason and Prudential Qma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Prudential Qma
The main advantage of trading using opposite Legg Mason and Prudential Qma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Prudential Qma 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 Prudential Qma will offset losses from the drop in Prudential Qma'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 |
| Prudential Qma vs. Jpmorgan Diversified Fund | Prudential Qma vs. Global Diversified Income | Prudential Qma vs. Federated Hermes Conservative | Prudential Qma vs. Allianzgi Diversified 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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