Correlation Between Legg Mason and Harbor Core
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Harbor Core 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 Harbor Core 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 Harbor Core Bond, you can compare the effects of market volatilities on Legg Mason and Harbor Core 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 Harbor Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Harbor Core.
Diversification Opportunities for Legg Mason and Harbor Core
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Harbor is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Harbor Core Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbor Core Bond 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 Harbor Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbor Core Bond has no effect on the direction of Legg Mason i.e., Legg Mason and Harbor Core go up and down completely randomly.
Pair Corralation between Legg Mason and Harbor Core
Assuming the 90 days horizon Legg Mason Global is expected to generate 0.86 times more return on investment than Harbor Core. However, Legg Mason Global is 1.16 times less risky than Harbor Core. It trades about 0.09 of its potential returns per unit of risk. Harbor Core Bond is currently generating about 0.07 per unit of risk. If you would invest 870.00 in Legg Mason Global on September 12, 2024 and sell it today you would earn a total of 90.00 from holding Legg Mason Global or generate 10.34% 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. Harbor Core Bond
Performance |
| Timeline |
| Legg Mason Global |
| Harbor Core Bond |
Legg Mason and Harbor Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Harbor Core
The main advantage of trading using opposite Legg Mason and Harbor Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Harbor Core 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 Harbor Core will offset losses from the drop in Harbor Core's long position.| Legg Mason vs. Ab Global Real | Legg Mason vs. Kinetics Global Fund | Legg Mason vs. Mirova Global Green | Legg Mason vs. Scharf Global Opportunity |
| Harbor Core vs. Ab Global Risk | Harbor Core vs. Ab Global Real | Harbor Core vs. Legg Mason Global | Harbor Core vs. Scharf Global Opportunity |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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