Correlation Between Mfs Porate and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Mfs Porate and Legg Mason 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 Mfs Porate and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Porate Bond and Legg Mason Bw, you can compare the effects of market volatilities on Mfs Porate and Legg Mason 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 Mfs Porate with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Porate and Legg Mason.
Diversification Opportunities for Mfs Porate and Legg Mason
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mfs and Legg is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Porate Bond and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw and Mfs Porate 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 Mfs Porate Bond are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Bw has no effect on the direction of Mfs Porate i.e., Mfs Porate and Legg Mason go up and down completely randomly.
Pair Corralation between Mfs Porate and Legg Mason
Assuming the 90 days horizon Mfs Porate is expected to generate 3.08 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Mfs Porate Bond is 1.86 times less risky than Legg Mason. It trades about 0.05 of its potential returns per unit of risk. Legg Mason Bw is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,789 in Legg Mason Bw on September 3, 2024 and sell it today you would earn a total of 591.00 from holding Legg Mason Bw or generate 33.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Porate Bond vs. Legg Mason Bw
Performance |
| Timeline |
| Mfs Porate Bond |
| Legg Mason Bw |
Mfs Porate and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Porate and Legg Mason
The main advantage of trading using opposite Mfs Porate and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Porate position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Mfs Porate vs. Mfs Aggressive Growth | Mfs Porate vs. Mfs Research Fund | Mfs Porate vs. Mfs Series Trust | Mfs Porate vs. Mfs California Municipal |
| Legg Mason vs. Ultramid Cap Profund Ultramid Cap | Legg Mason vs. Hennessy Nerstone Mid | Legg Mason vs. Boston Partners Small | Legg Mason vs. Fpa Queens Road |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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