Correlation Between Legg Mason and Hartford Dividend
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Hartford Dividend 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 Hartford Dividend 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 Hartford Dividend And, you can compare the effects of market volatilities on Legg Mason and Hartford Dividend 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 Hartford Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Hartford Dividend.
Diversification Opportunities for Legg Mason and Hartford Dividend
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Hartford is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Hartford Dividend And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Dividend And 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 Hartford Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Dividend And has no effect on the direction of Legg Mason i.e., Legg Mason and Hartford Dividend go up and down completely randomly.
Pair Corralation between Legg Mason and Hartford Dividend
Assuming the 90 days horizon Legg Mason Bw is expected to generate 1.1 times more return on investment than Hartford Dividend. However, Legg Mason is 1.1 times more volatile than Hartford Dividend And. It trades about 0.17 of its potential returns per unit of risk. Hartford Dividend And is currently generating about 0.1 per unit of risk. If you would invest 1,780 in Legg Mason Bw on September 2, 2024 and sell it today you would earn a total of 608.00 from holding Legg Mason Bw or generate 34.16% 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. Hartford Dividend And
Performance |
| Timeline |
| Legg Mason Bw |
| Hartford Dividend And |
Legg Mason and Hartford Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Hartford Dividend
The main advantage of trading using opposite Legg Mason and Hartford Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Hartford Dividend 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 Hartford Dividend will offset losses from the drop in Hartford Dividend'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 |
| Hartford Dividend vs. Aqr Long Short Equity | Hartford Dividend vs. Aqr Sustainable Long Short | Hartford Dividend vs. Doubleline Emerging Markets | Hartford Dividend vs. Rbc Emerging Markets |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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