Correlation Between Legg Mason and Blackrock International
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Blackrock International 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 Blackrock International 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 Blackrock International, you can compare the effects of market volatilities on Legg Mason and Blackrock International 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 Blackrock International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Blackrock International.
Diversification Opportunities for Legg Mason and Blackrock International
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legg and Blackrock is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Blackrock International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International 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 Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of Legg Mason i.e., Legg Mason and Blackrock International go up and down completely randomly.
Pair Corralation between Legg Mason and Blackrock International
Assuming the 90 days horizon Legg Mason is expected to generate 1.08 times less return on investment than Blackrock International. In addition to that, Legg Mason is 1.0 times more volatile than Blackrock International. It trades about 0.04 of its total potential returns per unit of risk. Blackrock International is currently generating about 0.04 per unit of volatility. If you would invest 1,633 in Blackrock International on August 27, 2024 and sell it today you would earn a total of 322.00 from holding Blackrock International or generate 19.72% 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. Blackrock International
Performance |
| Timeline |
| Legg Mason Bw |
| Blackrock International |
Legg Mason and Blackrock International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Blackrock International
The main advantage of trading using opposite Legg Mason and Blackrock International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Blackrock International 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 Blackrock International will offset losses from the drop in Blackrock International'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 |
| Blackrock International vs. William Blair Large | Blackrock International vs. Legg Mason Bw | Blackrock International vs. Rational Strategic Allocation | Blackrock International vs. Aqr 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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