Correlation Between Legg Mason and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Templeton Emerging 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 Templeton Emerging 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 Templeton Emerging Markets, you can compare the effects of market volatilities on Legg Mason and Templeton Emerging 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 Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Templeton Emerging.
Diversification Opportunities for Legg Mason and Templeton Emerging
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legg and Templeton is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging 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 Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of Legg Mason i.e., Legg Mason and Templeton Emerging go up and down completely randomly.
Pair Corralation between Legg Mason and Templeton Emerging
Assuming the 90 days horizon Legg Mason Bw is expected to generate 1.61 times more return on investment than Templeton Emerging. However, Legg Mason is 1.61 times more volatile than Templeton Emerging Markets. It trades about 0.16 of its potential returns per unit of risk. Templeton Emerging Markets is currently generating about -0.08 per unit of risk. If you would invest 2,190 in Legg Mason Bw on August 28, 2024 and sell it today you would earn a total of 177.00 from holding Legg Mason Bw or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Templeton Emerging Markets
Performance |
| Timeline |
| Legg Mason Bw |
| Templeton Emerging |
Legg Mason and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Templeton Emerging
The main advantage of trading using opposite Legg Mason and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Templeton Emerging 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 Templeton Emerging will offset losses from the drop in Templeton Emerging'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 |
| Templeton Emerging vs. Federated Mdt Large | Templeton Emerging vs. Legg Mason Bw | Templeton Emerging vs. Aqr Large Cap | Templeton Emerging vs. Quantitative U S |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |