Correlation Between Legg Mason and Voya Multi-manager
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Voya Multi-manager 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 Voya Multi-manager 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 Voya Multi Manager International, you can compare the effects of market volatilities on Legg Mason and Voya Multi-manager 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 Voya Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Voya Multi-manager.
Diversification Opportunities for Legg Mason and Voya Multi-manager
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legg and Voya is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Voya Multi Manager Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Multi Manager 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 Voya Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Multi Manager has no effect on the direction of Legg Mason i.e., Legg Mason and Voya Multi-manager go up and down completely randomly.
Pair Corralation between Legg Mason and Voya Multi-manager
Assuming the 90 days horizon Legg Mason Bw is expected to generate 0.91 times more return on investment than Voya Multi-manager. However, Legg Mason Bw is 1.09 times less risky than Voya Multi-manager. It trades about 0.08 of its potential returns per unit of risk. Voya Multi Manager International is currently generating about 0.05 per unit of risk. If you would invest 1,782 in Legg Mason Bw on September 3, 2024 and sell it today you would earn a total of 606.00 from holding Legg Mason Bw or generate 34.01% 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. Voya Multi Manager Internation
Performance |
| Timeline |
| Legg Mason Bw |
| Voya Multi Manager |
Legg Mason and Voya Multi-manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Voya Multi-manager
The main advantage of trading using opposite Legg Mason and Voya Multi-manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Voya Multi-manager 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 Voya Multi-manager will offset losses from the drop in Voya Multi-manager's long position.| Legg Mason vs. Mutual Of America | Legg Mason vs. Victory Rs Partners | Legg Mason vs. Royce Opportunity Fund | Legg Mason vs. Hennessy Nerstone Mid |
| Voya Multi-manager vs. Pioneer High Yield | Voya Multi-manager vs. Artisan High Income | Voya Multi-manager vs. Ab Global Risk | Voya Multi-manager vs. Goldman Sachs High |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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