Correlation Between Legg Mason and Mainstay Pinestone
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Mainstay Pinestone 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 Mainstay Pinestone 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 Mainstay Pinestone Equity, you can compare the effects of market volatilities on Legg Mason and Mainstay Pinestone 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 Mainstay Pinestone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Mainstay Pinestone.
Diversification Opportunities for Legg Mason and Mainstay Pinestone
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legg and Mainstay is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Mainstay Pinestone Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Pinestone Equity 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 Mainstay Pinestone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Pinestone Equity has no effect on the direction of Legg Mason i.e., Legg Mason and Mainstay Pinestone go up and down completely randomly.
Pair Corralation between Legg Mason and Mainstay Pinestone
Assuming the 90 days trading horizon Legg Mason Partners is expected to under-perform the Mainstay Pinestone. In addition to that, Legg Mason is 3.42 times more volatile than Mainstay Pinestone Equity. It trades about -0.23 of its total potential returns per unit of risk. Mainstay Pinestone Equity is currently generating about -0.06 per unit of volatility. If you would invest 2,004 in Mainstay Pinestone Equity on September 12, 2024 and sell it today you would lose (17.00) from holding Mainstay Pinestone Equity or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Mainstay Pinestone Equity
Performance |
| Timeline |
| Legg Mason Partners |
| Mainstay Pinestone Equity |
Legg Mason and Mainstay Pinestone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Mainstay Pinestone
The main advantage of trading using opposite Legg Mason and Mainstay Pinestone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Mainstay Pinestone 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 Mainstay Pinestone will offset losses from the drop in Mainstay Pinestone's long position.| Legg Mason vs. Eip Growth And | Legg Mason vs. Ftfa Franklin Templeton Growth | Legg Mason vs. Chase Growth Fund | Legg Mason vs. Pace Smallmedium Growth |
| Mainstay Pinestone vs. Vanguard Total Stock | Mainstay Pinestone vs. Vanguard 500 Index | Mainstay Pinestone vs. Vanguard Total Stock | Mainstay Pinestone vs. Vanguard Total Stock |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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