Correlation Between Legg Mason and Nuveen Georgia
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Nuveen Georgia 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 Nuveen Georgia 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 Nuveen Georgia Quality, you can compare the effects of market volatilities on Legg Mason and Nuveen Georgia 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 Nuveen Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Nuveen Georgia.
Diversification Opportunities for Legg Mason and Nuveen Georgia
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legg and Nuveen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Nuveen Georgia Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Georgia Quality 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 Nuveen Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Georgia Quality has no effect on the direction of Legg Mason i.e., Legg Mason and Nuveen Georgia go up and down completely randomly.
Pair Corralation between Legg Mason and Nuveen Georgia
If you would invest 1,554 in Legg Mason Partners on September 3, 2024 and sell it today you would earn a total of 68.00 from holding Legg Mason Partners or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 2.38% |
| Values | Daily Returns |
Legg Mason Partners vs. Nuveen Georgia Quality
Performance |
| Timeline |
| Legg Mason Partners |
| Nuveen Georgia Quality |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Legg Mason and Nuveen Georgia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Nuveen Georgia
The main advantage of trading using opposite Legg Mason and Nuveen Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Nuveen Georgia 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 Nuveen Georgia will offset losses from the drop in Nuveen Georgia'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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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