Correlation Between Leggmason Partners and Strategic Allocation
Can any of the company-specific risk be diversified away by investing in both Leggmason Partners and Strategic Allocation 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 Leggmason Partners and Strategic Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leggmason Partners Institutional and Strategic Allocation Aggressive, you can compare the effects of market volatilities on Leggmason Partners and Strategic Allocation 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 Leggmason Partners with a short position of Strategic Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggmason Partners and Strategic Allocation.
Diversification Opportunities for Leggmason Partners and Strategic Allocation
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leggmason and Strategic is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and Strategic Allocation Aggressiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation and Leggmason Partners 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 Leggmason Partners Institutional are associated (or correlated) with Strategic Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation has no effect on the direction of Leggmason Partners i.e., Leggmason Partners and Strategic Allocation go up and down completely randomly.
Pair Corralation between Leggmason Partners and Strategic Allocation
If you would invest 832.00 in Strategic Allocation Aggressive on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Strategic Allocation Aggressive or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leggmason Partners Institution vs. Strategic Allocation Aggressiv
Performance |
| Timeline |
| Leggmason Partners |
| Strategic Allocation |
Leggmason Partners and Strategic Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggmason Partners and Strategic Allocation
The main advantage of trading using opposite Leggmason Partners and Strategic Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggmason Partners position performs unexpectedly, Strategic Allocation 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 Strategic Allocation will offset losses from the drop in Strategic Allocation's long position.| Leggmason Partners vs. Multisector Bond Sma | Leggmason Partners vs. Ms Global Fixed | Leggmason Partners vs. Gmo High Yield | Leggmason Partners 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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