Correlation Between Legg Mason and Aston/herndon Large
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Aston/herndon Large 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 Aston/herndon Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Bw and Astonherndon Large Cap, you can compare the effects of market volatilities on Legg Mason and Aston/herndon Large 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 Aston/herndon Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Aston/herndon Large.
Diversification Opportunities for Legg Mason and Aston/herndon Large
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Aston/herndon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Astonherndon Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astonherndon Large Cap 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 Bw are associated (or correlated) with Aston/herndon Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astonherndon Large Cap has no effect on the direction of Legg Mason i.e., Legg Mason and Aston/herndon Large go up and down completely randomly.
Pair Corralation between Legg Mason and Aston/herndon Large
Assuming the 90 days horizon Legg Mason Bw is expected to generate 1.58 times more return on investment than Aston/herndon Large. However, Legg Mason is 1.58 times more volatile than Astonherndon Large Cap. It trades about 0.15 of its potential returns per unit of risk. Astonherndon Large Cap is currently generating about 0.12 per unit of risk. If you would invest 1,803 in Legg Mason Bw on September 5, 2024 and sell it today you would earn a total of 545.00 from holding Legg Mason Bw or generate 30.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Astonherndon Large Cap
Performance |
| Timeline |
| Legg Mason Bw |
| Astonherndon Large Cap |
Legg Mason and Aston/herndon Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Aston/herndon Large
The main advantage of trading using opposite Legg Mason and Aston/herndon Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Aston/herndon Large 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 Aston/herndon Large will offset losses from the drop in Aston/herndon Large's long position.| Legg Mason vs. Clearbridge Aggressive Growth | Legg Mason vs. Clearbridge Small Cap | Legg Mason vs. Qs International Equity | Legg Mason vs. Clearbridge Appreciation Fund |
| Aston/herndon Large vs. Bond Fund Investor | Aston/herndon Large vs. Strategic Enhanced Yield | Aston/herndon Large vs. Cavanal Hill Hedged | Aston/herndon Large vs. Limited Duration Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |