Correlation Between Legg Mason and Nuveen Kansas
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Nuveen Kansas 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 Kansas 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 Nuveen Kansas Municipal, you can compare the effects of market volatilities on Legg Mason and Nuveen Kansas 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 Kansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Nuveen Kansas.
Diversification Opportunities for Legg Mason and Nuveen Kansas
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legg and Nuveen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Nuveen Kansas Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Kansas Municipal 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 Nuveen Kansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Kansas Municipal has no effect on the direction of Legg Mason i.e., Legg Mason and Nuveen Kansas go up and down completely randomly.
Pair Corralation between Legg Mason and Nuveen Kansas
Assuming the 90 days horizon Legg Mason Global is expected to generate 1.15 times more return on investment than Nuveen Kansas. However, Legg Mason is 1.15 times more volatile than Nuveen Kansas Municipal. It trades about 0.19 of its potential returns per unit of risk. Nuveen Kansas Municipal is currently generating about 0.06 per unit of risk. If you would invest 914.00 in Legg Mason Global on October 25, 2024 and sell it today you would earn a total of 7.00 from holding Legg Mason Global or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Legg Mason Global vs. Nuveen Kansas Municipal
Performance |
| Timeline |
| Legg Mason Global |
| Nuveen Kansas Municipal |
Legg Mason and Nuveen Kansas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Nuveen Kansas
The main advantage of trading using opposite Legg Mason and Nuveen Kansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Nuveen Kansas 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 Kansas will offset losses from the drop in Nuveen Kansas' long position.| Legg Mason vs. Access Flex High | Legg Mason vs. Americafirst Monthly Risk On | Legg Mason vs. Ab High Income | Legg Mason vs. Siit High Yield |
| Nuveen Kansas vs. Wisdomtree Siegel Global | Nuveen Kansas vs. Legg Mason Global | Nuveen Kansas vs. Rbc Global Equity | Nuveen Kansas vs. Aqr Global Macro |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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