Correlation Between Legg Mason and Qs Us
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Qs Us 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 Qs Us 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 Qs Large Cap, you can compare the effects of market volatilities on Legg Mason and Qs Us 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 Qs Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Qs Us.
Diversification Opportunities for Legg Mason and Qs Us
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and LMUSX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Qs Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qs Large Cap 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 Qs Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qs Large Cap has no effect on the direction of Legg Mason i.e., Legg Mason and Qs Us go up and down completely randomly.
Pair Corralation between Legg Mason and Qs Us
Assuming the 90 days horizon Legg Mason is expected to generate 1.02 times less return on investment than Qs Us. In addition to that, Legg Mason is 1.13 times more volatile than Qs Large Cap. It trades about 0.21 of its total potential returns per unit of risk. Qs Large Cap is currently generating about 0.24 per unit of volatility. If you would invest 2,453 in Qs Large Cap on August 28, 2024 and sell it today you would earn a total of 119.00 from holding Qs Large Cap or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Qs Large Cap
Performance |
| Timeline |
| Legg Mason Bw |
| Qs Large Cap |
Legg Mason and Qs Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Qs Us
The main advantage of trading using opposite Legg Mason and Qs Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Qs Us 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 Qs Us will offset losses from the drop in Qs Us' 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 |
| Qs Us vs. Clearbridge Aggressive Growth | Qs Us vs. Clearbridge Small Cap | Qs Us vs. Qs International Equity | Qs Us 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |