Correlation Between Legg Mason and Guggenheim Managed
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Guggenheim Managed 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 Guggenheim Managed 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 Guggenheim Managed Futures, you can compare the effects of market volatilities on Legg Mason and Guggenheim Managed 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 Guggenheim Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Guggenheim Managed.
Diversification Opportunities for Legg Mason and Guggenheim Managed
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Legg and Guggenheim is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Guggenheim Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Managed 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 Guggenheim Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Managed has no effect on the direction of Legg Mason i.e., Legg Mason and Guggenheim Managed go up and down completely randomly.
Pair Corralation between Legg Mason and Guggenheim Managed
Assuming the 90 days horizon Legg Mason Global is expected to generate 0.48 times more return on investment than Guggenheim Managed. However, Legg Mason Global is 2.1 times less risky than Guggenheim Managed. It trades about 0.05 of its potential returns per unit of risk. Guggenheim Managed Futures is currently generating about 0.01 per unit of risk. If you would invest 852.00 in Legg Mason Global on November 2, 2024 and sell it today you would earn a total of 73.00 from holding Legg Mason Global or generate 8.57% 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. Guggenheim Managed Futures
Performance |
| Timeline |
| Legg Mason Global |
| Guggenheim Managed |
Legg Mason and Guggenheim Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Guggenheim Managed
The main advantage of trading using opposite Legg Mason and Guggenheim Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Guggenheim Managed 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 Guggenheim Managed will offset losses from the drop in Guggenheim Managed's long position.| Legg Mason vs. Morningstar Global Income | Legg Mason vs. Rational Strategic Allocation | Legg Mason vs. Tfa Alphagen Growth | Legg Mason vs. L Abbett Growth |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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