Correlation Between Legg Mason and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Lord Abbett 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 Lord Abbett 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 Lord Abbett Global, you can compare the effects of market volatilities on Legg Mason and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Lord Abbett.
Diversification Opportunities for Legg Mason and Lord Abbett
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legg and Lord is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Lord Abbett Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Global 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 Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Global has no effect on the direction of Legg Mason i.e., Legg Mason and Lord Abbett go up and down completely randomly.
Pair Corralation between Legg Mason and Lord Abbett
Assuming the 90 days horizon Legg Mason Global is expected to generate 0.41 times more return on investment than Lord Abbett. However, Legg Mason Global is 2.44 times less risky than Lord Abbett. It trades about 0.16 of its potential returns per unit of risk. Lord Abbett Global is currently generating about 0.0 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 7.00 from holding Legg Mason Global or generate 0.73% 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. Lord Abbett Global
Performance |
| Timeline |
| Legg Mason Global |
| Lord Abbett Global |
Legg Mason and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Lord Abbett
The main advantage of trading using opposite Legg Mason and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett'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 |
| Lord Abbett vs. Western Asset Diversified | Lord Abbett vs. Jhancock Diversified Macro | Lord Abbett vs. Massmutual Premier Diversified | Lord Abbett vs. Fidelity Advisor Diversified |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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