Correlation Between Legg Mason and Hanlon Tactical
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Hanlon Tactical 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 Hanlon Tactical 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 Hanlon Tactical Dividend, you can compare the effects of market volatilities on Legg Mason and Hanlon Tactical 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 Hanlon Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Hanlon Tactical.
Diversification Opportunities for Legg Mason and Hanlon Tactical
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Legg and Hanlon is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Hanlon Tactical Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanlon Tactical Dividend 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 Hanlon Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanlon Tactical Dividend has no effect on the direction of Legg Mason i.e., Legg Mason and Hanlon Tactical go up and down completely randomly.
Pair Corralation between Legg Mason and Hanlon Tactical
Assuming the 90 days horizon Legg Mason Global is expected to under-perform the Hanlon Tactical. But the mutual fund apears to be less risky and, when comparing its historical volatility, Legg Mason Global is 3.32 times less risky than Hanlon Tactical. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Hanlon Tactical Dividend is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,327 in Hanlon Tactical Dividend on October 22, 2024 and sell it today you would earn a total of 32.00 from holding Hanlon Tactical Dividend or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Global vs. Hanlon Tactical Dividend
Performance |
| Timeline |
| Legg Mason Global |
| Hanlon Tactical Dividend |
Legg Mason and Hanlon Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Hanlon Tactical
The main advantage of trading using opposite Legg Mason and Hanlon Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Hanlon Tactical 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 Hanlon Tactical will offset losses from the drop in Hanlon Tactical's long position.| Legg Mason vs. Growth Fund Of | Legg Mason vs. Morningstar Global Income | Legg Mason vs. Dreyfusstandish Global Fixed | Legg Mason vs. Transamerica Asset Allocation |
| Hanlon Tactical vs. Alliancebernstein Global Highome | Hanlon Tactical vs. Rbc Bluebay Global | Hanlon Tactical vs. Dreyfusstandish Global Fixed | Hanlon Tactical vs. Legg Mason Global |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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