Correlation Between Legg Mason and Calvert Moderate
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Calvert Moderate 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 Calvert Moderate 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 Calvert Moderate Allocation, you can compare the effects of market volatilities on Legg Mason and Calvert Moderate 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 Calvert Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Calvert Moderate.
Diversification Opportunities for Legg Mason and Calvert Moderate
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legg and Calvert is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Calvert Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Moderate All 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 Calvert Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Moderate All has no effect on the direction of Legg Mason i.e., Legg Mason and Calvert Moderate go up and down completely randomly.
Pair Corralation between Legg Mason and Calvert Moderate
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 1.11 times more return on investment than Calvert Moderate. However, Legg Mason is 1.11 times more volatile than Calvert Moderate Allocation. It trades about 0.11 of its potential returns per unit of risk. Calvert Moderate Allocation is currently generating about 0.09 per unit of risk. If you would invest 1,278 in Legg Mason Partners on August 27, 2024 and sell it today you would earn a total of 155.00 from holding Legg Mason Partners or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Calvert Moderate Allocation
Performance |
| Timeline |
| Legg Mason Partners |
| Calvert Moderate All |
Legg Mason and Calvert Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Calvert Moderate
The main advantage of trading using opposite Legg Mason and Calvert Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Calvert Moderate 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 Calvert Moderate will offset losses from the drop in Calvert Moderate's long position.| Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
| Calvert Moderate vs. Calvert Developed Market | Calvert Moderate vs. Calvert Developed Market | Calvert Moderate vs. Calvert Short Duration | Calvert Moderate vs. Calvert International Responsible |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |