Correlation Between Legg Mason and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Massmutual Select 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 Massmutual Select 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 Massmutual Select T, you can compare the effects of market volatilities on Legg Mason and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Massmutual Select.
Diversification Opportunities for Legg Mason and Massmutual Select
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Massmutual is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Massmutual Select T in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select has no effect on the direction of Legg Mason i.e., Legg Mason and Massmutual Select go up and down completely randomly.
Pair Corralation between Legg Mason and Massmutual Select
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 0.79 times more return on investment than Massmutual Select. However, Legg Mason Partners is 1.27 times less risky than Massmutual Select. It trades about 0.17 of its potential returns per unit of risk. Massmutual Select T is currently generating about 0.13 per unit of risk. If you would invest 1,296 in Legg Mason Partners on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Legg Mason Partners or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Massmutual Select T
Performance |
| Timeline |
| Legg Mason Partners |
| Massmutual Select |
Legg Mason and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Massmutual Select
The main advantage of trading using opposite Legg Mason and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Legg Mason vs. Issachar Fund Class | Legg Mason vs. T Rowe Price | Legg Mason vs. Volumetric Fund Volumetric | Legg Mason vs. T Rowe Price |
| Massmutual Select vs. Massmutual Select Mid | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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