Correlation Between The Gold and Legg Mason
Can any of the company-specific risk be diversified away by investing in both The Gold 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 The Gold and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gold Bullion and Legg Mason Partners, you can compare the effects of market volatilities on The Gold 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 The Gold with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gold and Legg Mason.
Diversification Opportunities for The Gold and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between The and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Gold Bullion 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 The Gold 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 The Gold Bullion 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 The Gold i.e., The Gold and Legg Mason go up and down completely randomly.
Pair Corralation between The Gold and Legg Mason
If you would invest 2,132 in The Gold Bullion on November 27, 2024 and sell it today you would earn a total of 154.00 from holding The Gold Bullion or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gold Bullion vs. Legg Mason Partners
Performance |
| Timeline |
| Gold Bullion |
| Legg Mason Partners |
The Gold and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Gold and Legg Mason
The main advantage of trading using opposite The Gold and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Gold 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.| The Gold vs. Quantified Market Leaders | The Gold vs. Quantified Managed Income | The Gold vs. Quantified Alternative Investment | The Gold vs. Quantified Stf Fund |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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