Correlation Between Legg Mason and Putnam Massachusetts
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Putnam Massachusetts 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 Putnam Massachusetts 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 Putnam Massachusetts Tax, you can compare the effects of market volatilities on Legg Mason and Putnam Massachusetts 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 Putnam Massachusetts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Putnam Massachusetts.
Diversification Opportunities for Legg Mason and Putnam Massachusetts
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Legg and Putnam is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Putnam Massachusetts Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Massachusetts Tax 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 Putnam Massachusetts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Massachusetts Tax has no effect on the direction of Legg Mason i.e., Legg Mason and Putnam Massachusetts go up and down completely randomly.
Pair Corralation between Legg Mason and Putnam Massachusetts
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 14.44 times more return on investment than Putnam Massachusetts. However, Legg Mason is 14.44 times more volatile than Putnam Massachusetts Tax. It trades about 0.17 of its potential returns per unit of risk. Putnam Massachusetts Tax is currently generating about 0.13 per unit of risk. If you would invest 1,257 in Legg Mason Partners on September 4, 2024 and sell it today you would earn a total of 54.00 from holding Legg Mason Partners or generate 4.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Legg Mason Partners vs. Putnam Massachusetts Tax
Performance |
| Timeline |
| Legg Mason Partners |
| Putnam Massachusetts Tax |
Legg Mason and Putnam Massachusetts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Putnam Massachusetts
The main advantage of trading using opposite Legg Mason and Putnam Massachusetts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Putnam Massachusetts 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 Putnam Massachusetts will offset losses from the drop in Putnam Massachusetts' 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 |
| Putnam Massachusetts vs. T Rowe Price | Putnam Massachusetts vs. T Rowe Price | Putnam Massachusetts vs. Legg Mason Partners | Putnam Massachusetts 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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