Correlation Between Arrow Managed and Leggmason Partners
Can any of the company-specific risk be diversified away by investing in both Arrow Managed and Leggmason Partners 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 Arrow Managed and Leggmason Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Leggmason Partners Institutional, you can compare the effects of market volatilities on Arrow Managed and Leggmason Partners 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 Arrow Managed with a short position of Leggmason Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Leggmason Partners.
Diversification Opportunities for Arrow Managed and Leggmason Partners
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arrow and Leggmason is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Leggmason Partners Institution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leggmason Partners and Arrow Managed 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 Arrow Managed Futures are associated (or correlated) with Leggmason Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leggmason Partners has no effect on the direction of Arrow Managed i.e., Arrow Managed and Leggmason Partners go up and down completely randomly.
Pair Corralation between Arrow Managed and Leggmason Partners
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 13.12 times more return on investment than Leggmason Partners. However, Arrow Managed is 13.12 times more volatile than Leggmason Partners Institutional. It trades about 0.07 of its potential returns per unit of risk. Leggmason Partners Institutional is currently generating about 0.09 per unit of risk. If you would invest 542.00 in Arrow Managed Futures on November 3, 2024 and sell it today you would earn a total of 55.00 from holding Arrow Managed Futures or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Leggmason Partners Institution
Performance |
| Timeline |
| Arrow Managed Futures |
| Leggmason Partners |
Arrow Managed and Leggmason Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Leggmason Partners
The main advantage of trading using opposite Arrow Managed and Leggmason Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed position performs unexpectedly, Leggmason Partners 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 Leggmason Partners will offset losses from the drop in Leggmason Partners' long position.| Arrow Managed vs. Gabelli Convertible And | Arrow Managed vs. Rationalpier 88 Convertible | Arrow Managed vs. Advent Claymore Convertible | Arrow Managed vs. Virtus Convertible |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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