Correlation Between Legg Mason and Fidelity Asset
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Fidelity 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 Fidelity 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 Fidelity Asset Manager, you can compare the effects of market volatilities on Legg Mason and Fidelity 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 Fidelity Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Fidelity Asset.
Diversification Opportunities for Legg Mason and Fidelity Asset
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Legg and Fidelity is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Fidelity Asset Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Asset Manager 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 Fidelity Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Asset Manager has no effect on the direction of Legg Mason i.e., Legg Mason and Fidelity Asset go up and down completely randomly.
Pair Corralation between Legg Mason and Fidelity Asset
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 3.27 times more return on investment than Fidelity Asset. However, Legg Mason is 3.27 times more volatile than Fidelity Asset Manager. It trades about 0.04 of its potential returns per unit of risk. Fidelity Asset Manager is currently generating about 0.12 per unit of risk. If you would invest 2,007 in Legg Mason Partners on September 12, 2024 and sell it today you would earn a total of 165.00 from holding Legg Mason Partners or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Fidelity Asset Manager
Performance |
| Timeline |
| Legg Mason Partners |
| Fidelity Asset Manager |
Legg Mason and Fidelity Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Fidelity Asset
The main advantage of trading using opposite Legg Mason and Fidelity Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Fidelity 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 Fidelity Asset will offset losses from the drop in Fidelity Asset'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 |
| Fidelity Asset vs. Calvert High Yield | Fidelity Asset vs. Franklin High Income | Fidelity Asset vs. T Rowe Price | Fidelity Asset vs. California High Yield Municipal |
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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