Correlation Between Legg Mason and Simt Multi-asset
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Simt Multi-asset 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 Simt Multi-asset 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 Simt Multi Asset Capital, you can compare the effects of market volatilities on Legg Mason and Simt Multi-asset 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 Simt Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Simt Multi-asset.
Diversification Opportunities for Legg Mason and Simt Multi-asset
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legg and Simt is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Simt Multi Asset Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset 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 Simt Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Legg Mason i.e., Legg Mason and Simt Multi-asset go up and down completely randomly.
Pair Corralation between Legg Mason and Simt Multi-asset
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 3.01 times more return on investment than Simt Multi-asset. However, Legg Mason is 3.01 times more volatile than Simt Multi Asset Capital. It trades about 0.1 of its potential returns per unit of risk. Simt Multi Asset Capital is currently generating about 0.14 per unit of risk. If you would invest 1,038 in Legg Mason Partners on September 4, 2024 and sell it today you would earn a total of 273.00 from holding Legg Mason Partners or generate 26.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Legg Mason Partners vs. Simt Multi Asset Capital
Performance |
| Timeline |
| Legg Mason Partners |
| Simt Multi Asset |
Legg Mason and Simt Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Simt Multi-asset
The main advantage of trading using opposite Legg Mason and Simt Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Simt Multi-asset 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 Simt Multi-asset will offset losses from the drop in Simt Multi-asset'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 |
| Simt Multi-asset vs. Simt Multi Asset Accumulation | Simt Multi-asset vs. Saat Market Growth | Simt Multi-asset vs. Simt Real Return | Simt Multi-asset vs. Simt Small 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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