Correlation Between Legg Mason and Dreyfus/standish
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Dreyfus/standish 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 Dreyfus/standish 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 Dreyfusstandish Global Fixed, you can compare the effects of market volatilities on Legg Mason and Dreyfus/standish 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 Dreyfus/standish. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Dreyfus/standish.
Diversification Opportunities for Legg Mason and Dreyfus/standish
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Dreyfus/standish is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Dreyfusstandish Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusstandish Global 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 Dreyfus/standish. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusstandish Global has no effect on the direction of Legg Mason i.e., Legg Mason and Dreyfus/standish go up and down completely randomly.
Pair Corralation between Legg Mason and Dreyfus/standish
Assuming the 90 days horizon Legg Mason Global is expected to generate about the same return on investment as Dreyfusstandish Global Fixed. However, Legg Mason is 1.45 times more volatile than Dreyfusstandish Global Fixed. It trades about 0.05 of its potential returns per unit of risk. Dreyfusstandish Global Fixed is currently producing about 0.07 per unit of risk. If you would invest 1,811 in Dreyfusstandish Global Fixed on September 3, 2024 and sell it today you would earn a total of 173.00 from holding Dreyfusstandish Global Fixed or generate 9.55% 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 Global vs. Dreyfusstandish Global Fixed
Performance |
| Timeline |
| Legg Mason Global |
| Dreyfusstandish Global |
Legg Mason and Dreyfus/standish Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Dreyfus/standish
The main advantage of trading using opposite Legg Mason and Dreyfus/standish positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Dreyfus/standish 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 Dreyfus/standish will offset losses from the drop in Dreyfus/standish'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 |
| Dreyfus/standish vs. American Century Etf | Dreyfus/standish vs. Mutual Of America | Dreyfus/standish vs. Hennessy Nerstone Mid | Dreyfus/standish vs. Vanguard Small Cap Value |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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