Correlation Between Issachar Fund and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Issachar Fund 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 Issachar Fund and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Issachar Fund Class and Legg Mason Partners, you can compare the effects of market volatilities on Issachar Fund 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 Issachar Fund with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Issachar Fund and Legg Mason.
Diversification Opportunities for Issachar Fund and Legg Mason
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Issachar and Legg is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Issachar Fund Class and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners and Issachar Fund 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 Issachar Fund Class 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 Partners has no effect on the direction of Issachar Fund i.e., Issachar Fund and Legg Mason go up and down completely randomly.
Pair Corralation between Issachar Fund and Legg Mason
Assuming the 90 days horizon Issachar Fund Class is expected to generate 3.18 times more return on investment than Legg Mason. However, Issachar Fund is 3.18 times more volatile than Legg Mason Partners. It trades about 0.14 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.22 per unit of risk. If you would invest 1,008 in Issachar Fund Class on September 13, 2024 and sell it today you would earn a total of 31.00 from holding Issachar Fund Class or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Issachar Fund Class vs. Legg Mason Partners
Performance |
| Timeline |
| Issachar Fund Class |
| Legg Mason Partners |
Issachar Fund and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Issachar Fund and Legg Mason
The main advantage of trading using opposite Issachar Fund and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Issachar Fund 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.| Issachar Fund vs. Issachar Fund Issachar | Issachar Fund vs. Fidelity Advisor Growth | Issachar Fund vs. Vanguard Small Cap Index | Issachar Fund vs. Vanguard Mid Cap Index |
| Legg Mason vs. Auer Growth Fund | Legg Mason vs. Eic Value Fund | Legg Mason vs. Nasdaq 100 Index Fund | Legg Mason vs. Balanced Fund Investor |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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