Correlation Between Virtus Real and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Virtus Real 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 Virtus Real and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Real Estate and Legg Mason Bw, you can compare the effects of market volatilities on Virtus Real 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 Virtus Real with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Real and Legg Mason.
Diversification Opportunities for Virtus Real and Legg Mason
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Virtus and Legg is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Real Estate 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 Virtus Real 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 Virtus Real Estate 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 Virtus Real i.e., Virtus Real and Legg Mason go up and down completely randomly.
Pair Corralation between Virtus Real and Legg Mason
Assuming the 90 days horizon Virtus Real Estate is expected to generate 1.82 times more return on investment than Legg Mason. However, Virtus Real is 1.82 times more volatile than Legg Mason Bw. It trades about 0.11 of its potential returns per unit of risk. Legg Mason Bw is currently generating about -0.12 per unit of risk. If you would invest 2,129 in Virtus Real Estate on August 29, 2024 and sell it today you would earn a total of 50.00 from holding Virtus Real Estate or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Real Estate vs. Legg Mason Bw
Performance |
| Timeline |
| Virtus Real Estate |
| Legg Mason Bw |
Virtus Real and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Real and Legg Mason
The main advantage of trading using opposite Virtus Real and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Real 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.| Virtus Real vs. Realty Income | Virtus Real vs. Dynex Capital | Virtus Real vs. First Industrial Realty | Virtus Real vs. Healthcare Realty Trust |
| Legg Mason vs. Virtus Real Estate | Legg Mason vs. Fidelity Real Estate | Legg Mason vs. Columbia Real Estate | Legg Mason vs. Commonwealth Real Estate |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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