Correlation Between Legg Mason and Invesco International
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Invesco International 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 Invesco International 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 Invesco International Growth, you can compare the effects of market volatilities on Legg Mason and Invesco International 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 Invesco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Invesco International.
Diversification Opportunities for Legg Mason and Invesco International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Legg and Invesco is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Invesco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco International 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 Invesco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco International has no effect on the direction of Legg Mason i.e., Legg Mason and Invesco International go up and down completely randomly.
Pair Corralation between Legg Mason and Invesco International
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 0.9 times more return on investment than Invesco International. However, Legg Mason Partners is 1.11 times less risky than Invesco International. It trades about 0.31 of its potential returns per unit of risk. Invesco International Growth is currently generating about 0.0 per unit of risk. If you would invest 2,336 in Legg Mason Partners on September 5, 2024 and sell it today you would earn a total of 112.00 from holding Legg Mason Partners or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Invesco International Growth
Performance |
| Timeline |
| Legg Mason Partners |
| Invesco International |
Legg Mason and Invesco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Invesco International
The main advantage of trading using opposite Legg Mason and Invesco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Invesco International 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 Invesco International will offset losses from the drop in Invesco International's long position.| Legg Mason vs. Victory Rs Partners | Legg Mason vs. American Century Etf | Legg Mason vs. Royce Opportunity Fund | Legg Mason vs. Boston Partners Small |
| Invesco International vs. Artisan Emerging Markets | Invesco International vs. Legg Mason Partners | Invesco International vs. Rbc Emerging Markets | Invesco International vs. Jpmorgan Emerging Markets |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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