Correlation Between Legg Mason and 1290 Gamco
Can any of the company-specific risk be diversified away by investing in both Legg Mason and 1290 Gamco 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 1290 Gamco 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 1290 Gamco Smallmid, you can compare the effects of market volatilities on Legg Mason and 1290 Gamco 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 1290 Gamco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and 1290 Gamco.
Diversification Opportunities for Legg Mason and 1290 Gamco
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Legg and 1290 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and 1290 Gamco Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Gamco Smallmid 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 1290 Gamco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Gamco Smallmid has no effect on the direction of Legg Mason i.e., Legg Mason and 1290 Gamco go up and down completely randomly.
Pair Corralation between Legg Mason and 1290 Gamco
Assuming the 90 days trading horizon Legg Mason is expected to generate 1.3 times less return on investment than 1290 Gamco. But when comparing it to its historical volatility, Legg Mason Partners is 2.06 times less risky than 1290 Gamco. It trades about 0.17 of its potential returns per unit of risk. 1290 Gamco Smallmid is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,843 in 1290 Gamco Smallmid on September 13, 2024 and sell it today you would earn a total of 29.00 from holding 1290 Gamco Smallmid or generate 1.57% 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. 1290 Gamco Smallmid
Performance |
| Timeline |
| Legg Mason Partners |
| 1290 Gamco Smallmid |
Legg Mason and 1290 Gamco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and 1290 Gamco
The main advantage of trading using opposite Legg Mason and 1290 Gamco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, 1290 Gamco 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 1290 Gamco will offset losses from the drop in 1290 Gamco'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 |
| 1290 Gamco vs. Franklin Emerging Market | 1290 Gamco vs. Origin Emerging Markets | 1290 Gamco vs. Shelton Emerging Markets | 1290 Gamco vs. Black Oak Emerging |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |