Correlation Between Nuveen Us and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Nuveen Us 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 Nuveen Us and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Infrastructure Income and Legg Mason Bw, you can compare the effects of market volatilities on Nuveen Us 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 Nuveen Us with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Us and Legg Mason.
Diversification Opportunities for Nuveen Us and Legg Mason
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Legg is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Infrastructure Income 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 Nuveen Us 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 Nuveen Infrastructure Income 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 Nuveen Us i.e., Nuveen Us and Legg Mason go up and down completely randomly.
Pair Corralation between Nuveen Us and Legg Mason
Assuming the 90 days horizon Nuveen Us is expected to generate 11.94 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Nuveen Infrastructure Income is 25.77 times less risky than Legg Mason. It trades about 0.47 of its potential returns per unit of risk. Legg Mason Bw is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,216 in Legg Mason Bw on August 27, 2024 and sell it today you would earn a total of 105.00 from holding Legg Mason Bw or generate 4.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Infrastructure Income vs. Legg Mason Bw
Performance |
| Timeline |
| Nuveen Infrastructure |
| Legg Mason Bw |
Nuveen Us and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Us and Legg Mason
The main advantage of trading using opposite Nuveen Us and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Us 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.| Nuveen Us vs. Legg Mason Bw | Nuveen Us vs. Aqr Large Cap | Nuveen Us vs. Quantitative U S | Nuveen Us vs. Rational Strategic Allocation |
| Legg Mason vs. Clearbridge Aggressive Growth | Legg Mason vs. Clearbridge Small Cap | Legg Mason vs. Qs International Equity | Legg Mason vs. Clearbridge Appreciation Fund |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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