Correlation Between Legg Mason and Voya Index
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Voya Index 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 Voya Index 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 Voya Index Solution, you can compare the effects of market volatilities on Legg Mason and Voya Index 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 Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Voya Index.
Diversification Opportunities for Legg Mason and Voya Index
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Legg and Voya is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Voya Index Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Solution 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 Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Solution has no effect on the direction of Legg Mason i.e., Legg Mason and Voya Index go up and down completely randomly.
Pair Corralation between Legg Mason and Voya Index
Assuming the 90 days horizon Legg Mason is expected to generate 3.28 times less return on investment than Voya Index. But when comparing it to its historical volatility, Legg Mason Global is 2.57 times less risky than Voya Index. It trades about 0.06 of its potential returns per unit of risk. Voya Index Solution is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,489 in Voya Index Solution on September 12, 2024 and sell it today you would earn a total of 352.00 from holding Voya Index Solution or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Global vs. Voya Index Solution
Performance |
| Timeline |
| Legg Mason Global |
| Voya Index Solution |
Legg Mason and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Voya Index
The main advantage of trading using opposite Legg Mason and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Voya Index 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 Voya Index will offset losses from the drop in Voya Index'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 |
| Voya Index vs. Columbia Moderate Growth | Voya Index vs. Qs Moderate Growth | Voya Index vs. Sierra E Retirement | Voya Index vs. Jp Morgan Smartretirement |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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