Correlation Between Legg Mason and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Legg Mason 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 Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Bw and Legg Mason Global, you can compare the effects of market volatilities on Legg Mason and Legg Mason 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 Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Legg Mason.
Diversification Opportunities for Legg Mason and Legg Mason
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legg and Legg is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Legg Mason Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason 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 Bw are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Global has no effect on the direction of Legg Mason i.e., Legg Mason and Legg Mason go up and down completely randomly.
Pair Corralation between Legg Mason and Legg Mason
Assuming the 90 days horizon Legg Mason is expected to generate 5.86 times less return on investment than Legg Mason. In addition to that, Legg Mason is 2.32 times more volatile than Legg Mason Global. It trades about 0.01 of its total potential returns per unit of risk. Legg Mason Global is currently generating about 0.11 per unit of volatility. If you would invest 930.00 in Legg Mason Global on September 2, 2024 and sell it today you would earn a total of 29.00 from holding Legg Mason Global or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Legg Mason Global
Performance |
| Timeline |
| Legg Mason Bw |
| Legg Mason Global |
Legg Mason and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Legg Mason
The main advantage of trading using opposite Legg Mason and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Legg Mason vs. Clearbridge Aggressive Growth | Legg Mason vs. Clearbridge Small Cap | Legg Mason vs. Qs International Equity | Legg Mason vs. Clearbridge Appreciation Fund |
| Legg Mason vs. Jpmorgan Small Cap | Legg Mason vs. Ab Small Cap | Legg Mason vs. Vanguard Small Cap Growth | Legg Mason vs. Touchstone Small Cap |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |