Correlation Between Legg Mason and Jpmorgan Floating
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Jpmorgan Floating 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 Jpmorgan Floating 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 Jpmorgan Floating Rate, you can compare the effects of market volatilities on Legg Mason and Jpmorgan Floating 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 Jpmorgan Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Jpmorgan Floating.
Diversification Opportunities for Legg Mason and Jpmorgan Floating
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Legg and Jpmorgan is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Jpmorgan Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Floating Rate 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 Jpmorgan Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Floating Rate has no effect on the direction of Legg Mason i.e., Legg Mason and Jpmorgan Floating go up and down completely randomly.
Pair Corralation between Legg Mason and Jpmorgan Floating
Assuming the 90 days horizon Legg Mason Global is expected to generate 2.21 times more return on investment than Jpmorgan Floating. However, Legg Mason is 2.21 times more volatile than Jpmorgan Floating Rate. It trades about 0.1 of its potential returns per unit of risk. Jpmorgan Floating Rate is currently generating about 0.21 per unit of risk. If you would invest 932.00 in Legg Mason Global on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Legg Mason Global or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Global vs. Jpmorgan Floating Rate
Performance |
| Timeline |
| Legg Mason Global |
| Jpmorgan Floating Rate |
Legg Mason and Jpmorgan Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Jpmorgan Floating
The main advantage of trading using opposite Legg Mason and Jpmorgan Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Jpmorgan Floating 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 Jpmorgan Floating will offset losses from the drop in Jpmorgan Floating's long position.| Legg Mason vs. Dreyfusstandish Global Fixed | Legg Mason vs. Morningstar Global Income | Legg Mason vs. Franklin Mutual Global | Legg Mason vs. Ab Global Real |
| Jpmorgan Floating vs. Alliancebernstein Global High | Jpmorgan Floating vs. 361 Global Longshort | Jpmorgan Floating vs. Mirova Global Green | Jpmorgan Floating 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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