Correlation Between Legg Mason and Rbc Bluebay
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Rbc Bluebay 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 Rbc Bluebay 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 Rbc Bluebay Global, you can compare the effects of market volatilities on Legg Mason and Rbc Bluebay 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 Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Rbc Bluebay.
Diversification Opportunities for Legg Mason and Rbc Bluebay
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Legg and Rbc is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Rbc Bluebay Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay 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 Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Global has no effect on the direction of Legg Mason i.e., Legg Mason and Rbc Bluebay go up and down completely randomly.
Pair Corralation between Legg Mason and Rbc Bluebay
Assuming the 90 days horizon Legg Mason is expected to generate 1.02 times less return on investment than Rbc Bluebay. In addition to that, Legg Mason is 1.05 times more volatile than Rbc Bluebay Global. It trades about 0.28 of its total potential returns per unit of risk. Rbc Bluebay Global is currently generating about 0.29 per unit of volatility. If you would invest 982.00 in Rbc Bluebay Global on November 3, 2024 and sell it today you would earn a total of 12.00 from holding Rbc Bluebay Global or generate 1.22% 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. Rbc Bluebay Global
Performance |
| Timeline |
| Legg Mason Global |
| Rbc Bluebay Global |
Legg Mason and Rbc Bluebay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Rbc Bluebay
The main advantage of trading using opposite Legg Mason and Rbc Bluebay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Rbc Bluebay 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 Rbc Bluebay will offset losses from the drop in Rbc Bluebay's long position.| Legg Mason vs. Lord Abbett Diversified | Legg Mason vs. Lord Abbett Diversified | Legg Mason vs. Fulcrum Diversified Absolute | Legg Mason vs. Wells Fargo Diversified |
| Rbc Bluebay vs. Jpmorgan Income Fund | Rbc Bluebay vs. Prudential High Yield | Rbc Bluebay vs. Parametric Modity Strategy | Rbc Bluebay vs. Prudential Floating Rate |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |