Correlation Between Nationwide Growth and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Nationwide Growth 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 Nationwide Growth and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Growth Fund and Legg Mason Partners, you can compare the effects of market volatilities on Nationwide Growth 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 Nationwide Growth with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Growth and Legg Mason.
Diversification Opportunities for Nationwide Growth and Legg Mason
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NATIONWIDE and Legg is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Growth Fund and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners and Nationwide Growth 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 Nationwide Growth Fund 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 Partners has no effect on the direction of Nationwide Growth i.e., Nationwide Growth and Legg Mason go up and down completely randomly.
Pair Corralation between Nationwide Growth and Legg Mason
Assuming the 90 days horizon Nationwide Growth is expected to generate 1.4 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Nationwide Growth Fund is 1.58 times less risky than Legg Mason. It trades about 0.13 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,427 in Legg Mason Partners on September 2, 2024 and sell it today you would earn a total of 456.00 from holding Legg Mason Partners or generate 18.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Growth Fund vs. Legg Mason Partners
Performance |
| Timeline |
| Nationwide Growth |
| Legg Mason Partners |
Nationwide Growth and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Growth and Legg Mason
The main advantage of trading using opposite Nationwide Growth and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Growth 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.| Nationwide Growth vs. Nationwide Mid Cap | Nationwide Growth vs. Nationwide Small Cap | Nationwide Growth vs. Nationwide International Index | Nationwide Growth vs. Nationwide Fund Institutional |
| Legg Mason vs. Shelton Emerging Markets | Legg Mason vs. Locorr Market Trend | Legg Mason vs. Rbc Emerging Markets | Legg Mason vs. Western Asset Diversified |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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