Correlation Between Legg Mason and Simt Multi
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Simt Multi 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 Simt Multi 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 Simt Multi Asset Inflation, you can compare the effects of market volatilities on Legg Mason and Simt Multi 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 Simt Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Simt Multi.
Diversification Opportunities for Legg Mason and Simt Multi
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legg and Simt is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Simt Multi Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset 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 Simt Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Legg Mason i.e., Legg Mason and Simt Multi go up and down completely randomly.
Pair Corralation between Legg Mason and Simt Multi
Assuming the 90 days horizon Legg Mason Bw is expected to generate 2.88 times more return on investment than Simt Multi. However, Legg Mason is 2.88 times more volatile than Simt Multi Asset Inflation. It trades about 0.08 of its potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about 0.03 per unit of risk. If you would invest 1,742 in Legg Mason Bw on September 12, 2024 and sell it today you would earn a total of 566.00 from holding Legg Mason Bw or generate 32.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Simt Multi Asset Inflation
Performance |
| Timeline |
| Legg Mason Bw |
| Simt Multi Asset |
Legg Mason and Simt Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Simt Multi
The main advantage of trading using opposite Legg Mason and Simt Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Simt Multi 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 Simt Multi will offset losses from the drop in Simt Multi's long position.| Legg Mason vs. Simt Multi Asset Inflation | Legg Mason vs. Loomis Sayles Inflation | Legg Mason vs. Guggenheim Managed Futures | Legg Mason vs. Ab Bond Inflation |
| Simt Multi vs. Capital Income Builder | Simt Multi vs. Capital Income Builder | Simt Multi vs. Capital Income Builder | Simt Multi vs. Capital Income Builder |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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