Correlation Between Legg Mason and Victory Incore
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Victory Incore 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 Victory Incore 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 Victory Incore Fund, you can compare the effects of market volatilities on Legg Mason and Victory Incore 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 Victory Incore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Victory Incore.
Diversification Opportunities for Legg Mason and Victory Incore
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legg and Victory is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Victory Incore Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Incore 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 Victory Incore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Incore has no effect on the direction of Legg Mason i.e., Legg Mason and Victory Incore go up and down completely randomly.
Pair Corralation between Legg Mason and Victory Incore
Assuming the 90 days horizon Legg Mason Bw is expected to generate 6.8 times more return on investment than Victory Incore. However, Legg Mason is 6.8 times more volatile than Victory Incore Fund. It trades about 0.35 of its potential returns per unit of risk. Victory Incore Fund is currently generating about 0.0 per unit of risk. If you would invest 2,228 in Legg Mason Bw on September 3, 2024 and sell it today you would earn a total of 160.00 from holding Legg Mason Bw or generate 7.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Victory Incore Fund
Performance |
| Timeline |
| Legg Mason Bw |
| Victory Incore |
Legg Mason and Victory Incore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Victory Incore
The main advantage of trading using opposite Legg Mason and Victory Incore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Victory Incore 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 Victory Incore will offset losses from the drop in Victory Incore'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 |
| Victory Incore vs. Limited Term Tax | Victory Incore vs. California Bond Fund | Victory Incore vs. Ab Bond Inflation | Victory Incore vs. Touchstone Premium Yield |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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