Correlation Between Clearbridge International and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Clearbridge International 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 Clearbridge International and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearbridge International Value and Legg Mason Bw, you can compare the effects of market volatilities on Clearbridge International 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 Clearbridge International with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearbridge International and Legg Mason.
Diversification Opportunities for Clearbridge International and Legg Mason
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Clearbridge and Legg is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Clearbridge International Valu and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw and Clearbridge International 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 Clearbridge International Value 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 Bw has no effect on the direction of Clearbridge International i.e., Clearbridge International and Legg Mason go up and down completely randomly.
Pair Corralation between Clearbridge International and Legg Mason
Assuming the 90 days horizon Clearbridge International Value is expected to generate 1.25 times more return on investment than Legg Mason. However, Clearbridge International is 1.25 times more volatile than Legg Mason Bw. It trades about 0.04 of its potential returns per unit of risk. Legg Mason Bw is currently generating about -0.08 per unit of risk. If you would invest 1,072 in Clearbridge International Value on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Clearbridge International Value or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Clearbridge International Valu vs. Legg Mason Bw
Performance |
| Timeline |
| Clearbridge International |
| Legg Mason Bw |
Clearbridge International and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearbridge International and Legg Mason
The main advantage of trading using opposite Clearbridge International and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearbridge International 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.| Clearbridge International vs. Abr 7525 Volatility | Clearbridge International vs. Falcon Focus Scv | Clearbridge International vs. Fa 529 Aggressive | Clearbridge International vs. Acm Dynamic Opportunity |
| Legg Mason vs. Simt Multi Asset Inflation | Legg Mason vs. Loomis Sayles Inflation | Legg Mason vs. Guggenheim Managed Futures | Legg Mason vs. Ab Bond Inflation |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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