Correlation Between Dreyfus New and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Dreyfus New 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 Dreyfus New and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreyfus New York and Legg Mason Partners, you can compare the effects of market volatilities on Dreyfus New 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 Dreyfus New with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreyfus New and Legg Mason.
Diversification Opportunities for Dreyfus New and Legg Mason
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dreyfus and Legg is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus New York 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 Dreyfus New 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 Dreyfus New York 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 Dreyfus New i.e., Dreyfus New and Legg Mason go up and down completely randomly.
Pair Corralation between Dreyfus New and Legg Mason
Assuming the 90 days horizon Dreyfus New is expected to generate 8.71 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Dreyfus New York is 2.54 times less risky than Legg Mason. It trades about 0.06 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,286 in Legg Mason Partners on September 3, 2024 and sell it today you would earn a total of 181.00 from holding Legg Mason Partners or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreyfus New York vs. Legg Mason Partners
Performance |
| Timeline |
| Dreyfus New York |
| Legg Mason Partners |
Dreyfus New and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreyfus New and Legg Mason
The main advantage of trading using opposite Dreyfus New and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreyfus New 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.| Dreyfus New vs. Legg Mason Partners | Dreyfus New vs. Artisan Emerging Markets | Dreyfus New vs. Shelton Emerging Markets | Dreyfus New vs. Rbc Emerging Markets |
| Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |