Correlation Between Legg Mason and Rbb Fund
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Rbb Fund 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 Rbb Fund 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 Rbb Fund , you can compare the effects of market volatilities on Legg Mason and Rbb Fund 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 Rbb Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Rbb Fund.
Diversification Opportunities for Legg Mason and Rbb Fund
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Legg and Rbb is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Rbb Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbb Fund 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 Rbb Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbb Fund has no effect on the direction of Legg Mason i.e., Legg Mason and Rbb Fund go up and down completely randomly.
Pair Corralation between Legg Mason and Rbb Fund
Assuming the 90 days horizon Legg Mason Global is expected to generate 0.26 times more return on investment than Rbb Fund. However, Legg Mason Global is 3.79 times less risky than Rbb Fund. It trades about 0.16 of its potential returns per unit of risk. Rbb Fund is currently generating about -0.04 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. Rbb Fund
Performance |
| Timeline |
| Legg Mason Global |
| Rbb Fund |
Legg Mason and Rbb Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Rbb Fund
The main advantage of trading using opposite Legg Mason and Rbb Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Rbb Fund 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 Rbb Fund will offset losses from the drop in Rbb Fund'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 |
| Rbb Fund vs. Ab Global Risk | Rbb Fund vs. Legg Mason Global | Rbb Fund vs. Barings Global Floating | Rbb Fund vs. Scharf Global Opportunity |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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