Correlation Between Legg Mason and Strategic Bond
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Strategic Bond 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 Strategic Bond 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 Strategic Bond Fund, you can compare the effects of market volatilities on Legg Mason and Strategic Bond 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 Strategic Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Strategic Bond.
Diversification Opportunities for Legg Mason and Strategic Bond
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Strategic is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Strategic Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Bond 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 Strategic Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Bond has no effect on the direction of Legg Mason i.e., Legg Mason and Strategic Bond go up and down completely randomly.
Pair Corralation between Legg Mason and Strategic Bond
Assuming the 90 days horizon Legg Mason Bw is expected to generate 2.27 times more return on investment than Strategic Bond. However, Legg Mason is 2.27 times more volatile than Strategic Bond Fund. It trades about 0.16 of its potential returns per unit of risk. Strategic Bond Fund is currently generating about 0.06 per unit of risk. If you would invest 2,037 in Legg Mason Bw on September 3, 2024 and sell it today you would earn a total of 337.00 from holding Legg Mason Bw or generate 16.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Strategic Bond Fund
Performance |
| Timeline |
| Legg Mason Bw |
| Strategic Bond |
Legg Mason and Strategic Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Strategic Bond
The main advantage of trading using opposite Legg Mason and Strategic Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Strategic Bond 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 Strategic Bond will offset losses from the drop in Strategic Bond's long position.| Legg Mason vs. Dodge Cox Stock | Legg Mason vs. American Funds American | Legg Mason vs. American Funds American | Legg Mason vs. American Mutual Fund |
| Strategic Bond vs. Sentinel Small Pany | Strategic Bond vs. Legg Mason Bw | Strategic Bond vs. Blackrock Sm Cap | Strategic Bond vs. T Rowe Price |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |