Correlation Between Legg Mason and Barings Global
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Barings Global 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 Barings Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Global and Barings Global Floating, you can compare the effects of market volatilities on Legg Mason and Barings Global 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 Barings Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Barings Global.
Diversification Opportunities for Legg Mason and Barings Global
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legg and Barings is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Barings Global Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Global Floating 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 Global are associated (or correlated) with Barings Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Global Floating has no effect on the direction of Legg Mason i.e., Legg Mason and Barings Global go up and down completely randomly.
Pair Corralation between Legg Mason and Barings Global
Assuming the 90 days horizon Legg Mason is expected to generate 1.31 times less return on investment than Barings Global. In addition to that, Legg Mason is 1.49 times more volatile than Barings Global Floating. It trades about 0.09 of its total potential returns per unit of risk. Barings Global Floating is currently generating about 0.18 per unit of volatility. If you would invest 843.00 in Barings Global Floating on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Barings Global Floating or generate 4.15% 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 Global vs. Barings Global Floating
Performance |
| Timeline |
| Legg Mason Global |
| Barings Global Floating |
Legg Mason and Barings Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Barings Global
The main advantage of trading using opposite Legg Mason and Barings Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Barings Global 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 Barings Global will offset losses from the drop in Barings Global's long position.| Legg Mason vs. Dreyfusstandish Global Fixed | Legg Mason vs. Morningstar Global Income | Legg Mason vs. Franklin Mutual Global | Legg Mason vs. Ab Global Real |
| Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Oppenheimer Senior Floating | Barings Global vs. Floating Rate Fund | Barings Global vs. Floating Rate Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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