Correlation Between Legg Mason and Carillon Chartwell
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Carillon Chartwell 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 Carillon Chartwell 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 Carillon Chartwell Short, you can compare the effects of market volatilities on Legg Mason and Carillon Chartwell 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 Carillon Chartwell. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Carillon Chartwell.
Diversification Opportunities for Legg Mason and Carillon Chartwell
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Legg and Carillon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Carillon Chartwell Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carillon Chartwell Short 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 Carillon Chartwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carillon Chartwell Short has no effect on the direction of Legg Mason i.e., Legg Mason and Carillon Chartwell go up and down completely randomly.
Pair Corralation between Legg Mason and Carillon Chartwell
Assuming the 90 days horizon Legg Mason Bw is expected to generate 9.23 times more return on investment than Carillon Chartwell. However, Legg Mason is 9.23 times more volatile than Carillon Chartwell Short. It trades about 0.28 of its potential returns per unit of risk. Carillon Chartwell Short is currently generating about 0.22 per unit of risk. If you would invest 2,236 in Legg Mason Bw on August 31, 2024 and sell it today you would earn a total of 140.00 from holding Legg Mason Bw or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Carillon Chartwell Short
Performance |
| Timeline |
| Legg Mason Bw |
| Carillon Chartwell Short |
Legg Mason and Carillon Chartwell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Carillon Chartwell
The main advantage of trading using opposite Legg Mason and Carillon Chartwell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Carillon Chartwell 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 Carillon Chartwell will offset losses from the drop in Carillon Chartwell'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 |
| Carillon Chartwell vs. Legg Mason Bw | Carillon Chartwell vs. Virtus Nfj Large Cap | Carillon Chartwell vs. Fundamental Large Cap | Carillon Chartwell vs. Qs Large Cap |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |