Correlation Between Legg Mason and Clearbridge Mid
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Clearbridge Mid 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 Clearbridge Mid 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 Clearbridge Mid Cap, you can compare the effects of market volatilities on Legg Mason and Clearbridge Mid 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 Clearbridge Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Clearbridge Mid.
Diversification Opportunities for Legg Mason and Clearbridge Mid
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legg and Clearbridge is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Clearbridge Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Mid Cap 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 Clearbridge Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Mid Cap has no effect on the direction of Legg Mason i.e., Legg Mason and Clearbridge Mid go up and down completely randomly.
Pair Corralation between Legg Mason and Clearbridge Mid
Assuming the 90 days horizon Legg Mason is expected to generate 9.42 times less return on investment than Clearbridge Mid. But when comparing it to its historical volatility, Legg Mason Bw is 3.93 times less risky than Clearbridge Mid. It trades about 0.02 of its potential returns per unit of risk. Clearbridge Mid Cap is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,019 in Clearbridge Mid Cap on September 3, 2024 and sell it today you would earn a total of 669.00 from holding Clearbridge Mid Cap or generate 22.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Bw vs. Clearbridge Mid Cap
Performance |
| Timeline |
| Legg Mason Bw |
| Clearbridge Mid Cap |
Legg Mason and Clearbridge Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Clearbridge Mid
The main advantage of trading using opposite Legg Mason and Clearbridge Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Clearbridge Mid 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 Clearbridge Mid will offset losses from the drop in Clearbridge Mid's long position.| Legg Mason vs. Cutler Equity | Legg Mason vs. Sarofim Equity | Legg Mason vs. Rbc Global Equity | Legg Mason vs. Multimedia Portfolio Multimedia |
| Clearbridge Mid vs. Mutual Of America | Clearbridge Mid vs. Columbia Small Cap | Clearbridge Mid vs. Heartland Value Plus | Clearbridge Mid vs. American Century Etf |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |