Correlation Between Leggmason Partners and Columbia Seligman
Can any of the company-specific risk be diversified away by investing in both Leggmason Partners and Columbia Seligman 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 Columbia Seligman 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 Columbia Seligman Global, you can compare the effects of market volatilities on Leggmason Partners and Columbia Seligman 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 Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggmason Partners and Columbia Seligman.
Diversification Opportunities for Leggmason Partners and Columbia Seligman
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leggmason and Columbia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and Columbia Seligman Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman Global 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 Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman Global has no effect on the direction of Leggmason Partners i.e., Leggmason Partners and Columbia Seligman go up and down completely randomly.
Pair Corralation between Leggmason Partners and Columbia Seligman
If you would invest 7,699 in Columbia Seligman Global on August 30, 2024 and sell it today you would earn a total of 499.00 from holding Columbia Seligman Global or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leggmason Partners Institution vs. Columbia Seligman Global
Performance |
| Timeline |
| Leggmason Partners |
| Columbia Seligman Global |
Leggmason Partners and Columbia Seligman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggmason Partners and Columbia Seligman
The main advantage of trading using opposite Leggmason Partners and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggmason Partners position performs unexpectedly, Columbia Seligman 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 Columbia Seligman will offset losses from the drop in Columbia Seligman's long position.| Leggmason Partners vs. Us Global Investors | Leggmason Partners vs. Ms Global Fixed | Leggmason Partners vs. Mirova Global Green | Leggmason Partners vs. Massmutual Premier Global |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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