Correlation Between Legg Mason and Aquila Three
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Aquila Three 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 Legg Mason and Aquila Three into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Partners and Aquila Three Peaks, you can compare the effects of market volatilities on Legg Mason and Aquila Three 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 Legg Mason with a short position of Aquila Three. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Aquila Three.
Diversification Opportunities for Legg Mason and Aquila Three
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Aquila is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Aquila Three Peaks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aquila Three Peaks and Legg Mason 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 Legg Mason Partners are associated (or correlated) with Aquila Three. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aquila Three Peaks has no effect on the direction of Legg Mason i.e., Legg Mason and Aquila Three go up and down completely randomly.
Pair Corralation between Legg Mason and Aquila Three
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 4.14 times more return on investment than Aquila Three. However, Legg Mason is 4.14 times more volatile than Aquila Three Peaks. It trades about 0.37 of its potential returns per unit of risk. Aquila Three Peaks is currently generating about 0.05 per unit of risk. If you would invest 1,549 in Legg Mason Partners on September 3, 2024 and sell it today you would earn a total of 73.00 from holding Legg Mason Partners or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 85.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Aquila Three Peaks
Performance |
| Timeline |
| Legg Mason Partners |
| Aquila Three Peaks |
Legg Mason and Aquila Three Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Aquila Three
The main advantage of trading using opposite Legg Mason and Aquila Three positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Aquila Three 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 Aquila Three will offset losses from the drop in Aquila Three's long position.| Legg Mason vs. Avantis Large Cap | Legg Mason vs. Qs Large Cap | Legg Mason vs. Americafirst Large Cap | Legg Mason vs. Dana Large Cap |
| Aquila Three vs. Tax Managed Large Cap | Aquila Three vs. Jhancock Disciplined Value | Aquila Three vs. Dodge Cox Stock | Aquila Three vs. Aqr Large Cap |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| 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 |