Correlation Between Legg Mason and Sit Mutual
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Sit Mutual 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 Sit Mutual 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 Sit Mutual Funds, you can compare the effects of market volatilities on Legg Mason and Sit Mutual 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 Sit Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Sit Mutual.
Diversification Opportunities for Legg Mason and Sit Mutual
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legg and Sit is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Sit Mutual Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Mutual Funds 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 Sit Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Mutual Funds has no effect on the direction of Legg Mason i.e., Legg Mason and Sit Mutual go up and down completely randomly.
Pair Corralation between Legg Mason and Sit Mutual
Assuming the 90 days horizon Legg Mason Bw is expected to generate 4.68 times more return on investment than Sit Mutual. However, Legg Mason is 4.68 times more volatile than Sit Mutual Funds. It trades about 0.05 of its potential returns per unit of risk. Sit Mutual Funds is currently generating about 0.07 per unit of risk. If you would invest 1,979 in Legg Mason Bw on September 1, 2024 and sell it today you would earn a total of 409.00 from holding Legg Mason Bw or generate 20.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Legg Mason Bw vs. Sit Mutual Funds
Performance |
| Timeline |
| Legg Mason Bw |
| Sit Mutual Funds |
Legg Mason and Sit Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Sit Mutual
The main advantage of trading using opposite Legg Mason and Sit Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Sit Mutual 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 Sit Mutual will offset losses from the drop in Sit Mutual's long position.| Legg Mason vs. Rbb Fund | Legg Mason vs. Aam Select Income | Legg Mason vs. Scharf Global Opportunity | Legg Mason vs. Falcon Focus Scv |
| Sit Mutual vs. Alternative Asset Allocation | Sit Mutual vs. Legg Mason Bw | Sit Mutual vs. T Rowe Price | Sit Mutual vs. Pace Large Growth |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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