Correlation Between Legg Mason and Europe 125x
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Europe 125x 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 Europe 125x 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 Europe 125x Strategy, you can compare the effects of market volatilities on Legg Mason and Europe 125x 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 Europe 125x. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Europe 125x.
Diversification Opportunities for Legg Mason and Europe 125x
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Europe is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Europe 125x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europe 125x Strategy 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 Europe 125x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europe 125x Strategy has no effect on the direction of Legg Mason i.e., Legg Mason and Europe 125x go up and down completely randomly.
Pair Corralation between Legg Mason and Europe 125x
Assuming the 90 days horizon Legg Mason Bw is expected to generate 0.71 times more return on investment than Europe 125x. However, Legg Mason Bw is 1.41 times less risky than Europe 125x. It trades about 0.11 of its potential returns per unit of risk. Europe 125x Strategy is currently generating about 0.02 per unit of risk. If you would invest 1,747 in Legg Mason Bw on August 28, 2024 and sell it today you would earn a total of 574.00 from holding Legg Mason Bw or generate 32.86% 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. Europe 125x Strategy
Performance |
| Timeline |
| Legg Mason Bw |
| Europe 125x Strategy |
Legg Mason and Europe 125x Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Europe 125x
The main advantage of trading using opposite Legg Mason and Europe 125x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Europe 125x 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 Europe 125x will offset losses from the drop in Europe 125x'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 |
| Europe 125x vs. Astor Longshort Fund | Europe 125x vs. Old Westbury Short Term | Europe 125x vs. Quantitative Longshort Equity | Europe 125x vs. Vanguard Institutional Short Term |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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