Correlation Between Leggmason Partners and Calvert Floating-rate
Can any of the company-specific risk be diversified away by investing in both Leggmason Partners and Calvert Floating-rate 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 Calvert Floating-rate 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 Calvert Floating Rate Advantage, you can compare the effects of market volatilities on Leggmason Partners and Calvert Floating-rate 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 Calvert Floating-rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggmason Partners and Calvert Floating-rate.
Diversification Opportunities for Leggmason Partners and Calvert Floating-rate
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Leggmason and Calvert is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and Calvert Floating Rate Advantag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Floating Rate 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 Calvert Floating-rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Floating Rate has no effect on the direction of Leggmason Partners i.e., Leggmason Partners and Calvert Floating-rate go up and down completely randomly.
Pair Corralation between Leggmason Partners and Calvert Floating-rate
Assuming the 90 days horizon Leggmason Partners is expected to generate 3.48 times less return on investment than Calvert Floating-rate. But when comparing it to its historical volatility, Leggmason Partners Institutional is 1.84 times less risky than Calvert Floating-rate. It trades about 0.09 of its potential returns per unit of risk. Calvert Floating Rate Advantage is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 868.00 in Calvert Floating Rate Advantage on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Calvert Floating Rate Advantage or generate 3.57% 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. Calvert Floating Rate Advantag
Performance |
| Timeline |
| Leggmason Partners |
| Calvert Floating Rate |
Leggmason Partners and Calvert Floating-rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggmason Partners and Calvert Floating-rate
The main advantage of trading using opposite Leggmason Partners and Calvert Floating-rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggmason Partners position performs unexpectedly, Calvert Floating-rate 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 Calvert Floating-rate will offset losses from the drop in Calvert Floating-rate'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 |
| Calvert Floating-rate vs. Virtus Convertible | Calvert Floating-rate vs. Gabelli Convertible And | Calvert Floating-rate vs. Fidelity Sai Convertible | Calvert Floating-rate vs. Calamos Dynamic Convertible |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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