Correlation Between Legg Mason and Jhancock Global
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Jhancock Global 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 Jhancock Global 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 Jhancock Global Equity, you can compare the effects of market volatilities on Legg Mason and Jhancock Global 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 Jhancock Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Jhancock Global.
Diversification Opportunities for Legg Mason and Jhancock Global
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Legg and Jhancock is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Jhancock Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Global Equity 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 Jhancock Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Global Equity has no effect on the direction of Legg Mason i.e., Legg Mason and Jhancock Global go up and down completely randomly.
Pair Corralation between Legg Mason and Jhancock Global
Assuming the 90 days horizon Legg Mason Global is expected to generate 0.48 times more return on investment than Jhancock Global. However, Legg Mason Global is 2.1 times less risky than Jhancock Global. It trades about 0.14 of its potential returns per unit of risk. Jhancock Global Equity is currently generating about -0.1 per unit of risk. If you would invest 953.00 in Legg Mason Global on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Legg Mason Global or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Legg Mason Global vs. Jhancock Global Equity
Performance |
| Timeline |
| Legg Mason Global |
| Jhancock Global Equity |
Legg Mason and Jhancock Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Jhancock Global
The main advantage of trading using opposite Legg Mason and Jhancock Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Jhancock Global 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 Jhancock Global will offset losses from the drop in Jhancock Global'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 |
| Jhancock Global vs. John Hancock Financial | Jhancock Global vs. Blackrock Financial Institutions | Jhancock Global vs. Angel Oak Financial | Jhancock Global vs. Icon Financial Fund |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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