Correlation Between Legg Mason and Gqg Partners
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Gqg Partners 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 Gqg Partners 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 Gqg Partners Quality, you can compare the effects of market volatilities on Legg Mason and Gqg Partners 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 Gqg Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Gqg Partners.
Diversification Opportunities for Legg Mason and Gqg Partners
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Legg and Gqg is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Gqg Partners Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gqg Partners Quality 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 Gqg Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gqg Partners Quality has no effect on the direction of Legg Mason i.e., Legg Mason and Gqg Partners go up and down completely randomly.
Pair Corralation between Legg Mason and Gqg Partners
Assuming the 90 days horizon Legg Mason is expected to generate 3.68 times less return on investment than Gqg Partners. But when comparing it to its historical volatility, Legg Mason Global is 1.75 times less risky than Gqg Partners. It trades about 0.03 of its potential returns per unit of risk. Gqg Partners Quality is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,057 in Gqg Partners Quality on October 24, 2024 and sell it today you would earn a total of 218.00 from holding Gqg Partners Quality or generate 20.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Legg Mason Global vs. Gqg Partners Quality
Performance |
| Timeline |
| Legg Mason Global |
| Gqg Partners Quality |
Legg Mason and Gqg Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Gqg Partners
The main advantage of trading using opposite Legg Mason and Gqg Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Gqg Partners 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 Gqg Partners will offset losses from the drop in Gqg Partners' long position.| Legg Mason vs. Goldman Sachs Mlp | Legg Mason vs. Pimco Energy Tactical | Legg Mason vs. Clearbridge Energy Mlp | Legg Mason vs. Alpsalerian Energy Infrastructure |
| Gqg Partners vs. Transamerica Asset Allocation | Gqg Partners vs. Pnc Balanced Allocation | Gqg Partners vs. Legg Mason Global | Gqg Partners vs. Dws 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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