Correlation Between Legg Mason and Jpmorgan Intrepid
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Jpmorgan Intrepid 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 Jpmorgan Intrepid 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 Jpmorgan Intrepid Value, you can compare the effects of market volatilities on Legg Mason and Jpmorgan Intrepid 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 Jpmorgan Intrepid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Jpmorgan Intrepid.
Diversification Opportunities for Legg Mason and Jpmorgan Intrepid
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legg and JPMORGAN is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Jpmorgan Intrepid Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Intrepid Value 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 Jpmorgan Intrepid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Intrepid Value has no effect on the direction of Legg Mason i.e., Legg Mason and Jpmorgan Intrepid go up and down completely randomly.
Pair Corralation between Legg Mason and Jpmorgan Intrepid
Assuming the 90 days trading horizon Legg Mason is expected to generate 1.57 times less return on investment than Jpmorgan Intrepid. But when comparing it to its historical volatility, Legg Mason Partners is 1.8 times less risky than Jpmorgan Intrepid. It trades about 0.38 of its potential returns per unit of risk. Jpmorgan Intrepid Value is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 3,207 in Jpmorgan Intrepid Value on September 4, 2024 and sell it today you would earn a total of 171.00 from holding Jpmorgan Intrepid Value or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Legg Mason Partners vs. Jpmorgan Intrepid Value
Performance |
| Timeline |
| Legg Mason Partners |
| Jpmorgan Intrepid Value |
Legg Mason and Jpmorgan Intrepid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Jpmorgan Intrepid
The main advantage of trading using opposite Legg Mason and Jpmorgan Intrepid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Jpmorgan Intrepid 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 Jpmorgan Intrepid will offset losses from the drop in Jpmorgan Intrepid'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 |
| Jpmorgan Intrepid vs. T Rowe Price | Jpmorgan Intrepid vs. T Rowe Price | Jpmorgan Intrepid vs. Legg Mason Partners | Jpmorgan Intrepid vs. T Rowe Price |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |