Correlation Between Legg Mason and Pgim Securitized
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Pgim Securitized 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 Pgim Securitized 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 Pgim Securitized Credit, you can compare the effects of market volatilities on Legg Mason and Pgim Securitized 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 Pgim Securitized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Pgim Securitized.
Diversification Opportunities for Legg Mason and Pgim Securitized
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legg and Pgim is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Pgim Securitized Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pgim Securitized Credit 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 Pgim Securitized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pgim Securitized Credit has no effect on the direction of Legg Mason i.e., Legg Mason and Pgim Securitized go up and down completely randomly.
Pair Corralation between Legg Mason and Pgim Securitized
Assuming the 90 days horizon Legg Mason Bw is expected to generate 7.27 times more return on investment than Pgim Securitized. However, Legg Mason is 7.27 times more volatile than Pgim Securitized Credit. It trades about 0.28 of its potential returns per unit of risk. Pgim Securitized Credit is currently generating about 0.24 per unit of risk. If you would invest 2,243 in Legg Mason Bw on August 31, 2024 and sell it today you would earn a total of 141.00 from holding Legg Mason Bw or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Pgim Securitized Credit
Performance |
| Timeline |
| Legg Mason Bw |
| Pgim Securitized Credit |
Legg Mason and Pgim Securitized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Pgim Securitized
The main advantage of trading using opposite Legg Mason and Pgim Securitized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Pgim Securitized 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 Pgim Securitized will offset losses from the drop in Pgim Securitized's long position.| Legg Mason vs. Vanguard Value Index | Legg Mason vs. Dodge Cox Stock | Legg Mason vs. American Mutual Fund | Legg Mason vs. American Funds American |
| Pgim Securitized vs. T Rowe Price | Pgim Securitized vs. Goldman Sachs Large | Pgim Securitized vs. T Rowe Price | Pgim Securitized vs. Legg Mason Bw |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |