Correlation Between Legg Mason and Nuveen Winslow
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Nuveen Winslow 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 Nuveen Winslow 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 Nuveen Winslow Large Cap, you can compare the effects of market volatilities on Legg Mason and Nuveen Winslow 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 Nuveen Winslow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Nuveen Winslow.
Diversification Opportunities for Legg Mason and Nuveen Winslow
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legg and NUVEEN is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Nuveen Winslow Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Winslow Large 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 Nuveen Winslow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Winslow Large has no effect on the direction of Legg Mason i.e., Legg Mason and Nuveen Winslow go up and down completely randomly.
Pair Corralation between Legg Mason and Nuveen Winslow
Assuming the 90 days horizon Legg Mason Bw is expected to generate 0.51 times more return on investment than Nuveen Winslow. However, Legg Mason Bw is 1.96 times less risky than Nuveen Winslow. It trades about 0.46 of its potential returns per unit of risk. Nuveen Winslow Large Cap is currently generating about 0.13 per unit of risk. If you would invest 1,963 in Legg Mason Bw on November 11, 2024 and sell it today you would earn a total of 122.00 from holding Legg Mason Bw or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Nuveen Winslow Large Cap
Performance |
| Timeline |
| Legg Mason Bw |
| Nuveen Winslow Large |
Legg Mason and Nuveen Winslow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Nuveen Winslow
The main advantage of trading using opposite Legg Mason and Nuveen Winslow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Nuveen Winslow 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 Nuveen Winslow will offset losses from the drop in Nuveen Winslow's long position.| Legg Mason vs. Issachar Fund Class | Legg Mason vs. Touchstone Funds Group | Legg Mason vs. Bbh Partner Fund | Legg Mason vs. T Rowe Price |
| Nuveen Winslow vs. Nuveen Small Cap | Nuveen Winslow vs. Nuveen Real Estate | Nuveen Winslow vs. Nuveen Real Estate | Nuveen Winslow vs. Nuveen Preferred Securities |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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