Correlation Between Leggmason Partners and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Leggmason Partners and Sterling Capital 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 Sterling Capital 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 Sterling Capital Porate, you can compare the effects of market volatilities on Leggmason Partners and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggmason Partners and Sterling Capital.
Diversification Opportunities for Leggmason Partners and Sterling Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Leggmason and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and Sterling Capital Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Porate 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Porate has no effect on the direction of Leggmason Partners i.e., Leggmason Partners and Sterling Capital go up and down completely randomly.
Pair Corralation between Leggmason Partners and Sterling Capital
Assuming the 90 days horizon Leggmason Partners Institutional is expected to generate 0.17 times more return on investment than Sterling Capital. However, Leggmason Partners Institutional is 5.84 times less risky than Sterling Capital. It trades about 0.11 of its potential returns per unit of risk. Sterling Capital Porate is currently generating about 0.01 per unit of risk. If you would invest 97.00 in Leggmason Partners Institutional on September 14, 2024 and sell it today you would earn a total of 3.00 from holding Leggmason Partners Institutional or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leggmason Partners Institution vs. Sterling Capital Porate
Performance |
| Timeline |
| Leggmason Partners |
| Sterling Capital Porate |
Leggmason Partners and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggmason Partners and Sterling Capital
The main advantage of trading using opposite Leggmason Partners and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggmason Partners position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Leggmason Partners vs. Locorr Market Trend | Leggmason Partners vs. Pnc Emerging Markets | Leggmason Partners vs. Sp Midcap Index | Leggmason Partners vs. Investec Emerging Markets |
| Sterling Capital vs. Gabelli Global Financial | Sterling Capital vs. Goldman Sachs Financial | Sterling Capital vs. Angel Oak Financial | Sterling Capital vs. Royce Global Financial |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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