Correlation Between Legg Mason and Capital Group
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Capital Group 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 Capital Group 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 Capital Group Emerging, you can compare the effects of market volatilities on Legg Mason and Capital Group 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 Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Capital Group.
Diversification Opportunities for Legg Mason and Capital Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Capital is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Capital Group Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Emerging 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 Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Emerging has no effect on the direction of Legg Mason i.e., Legg Mason and Capital Group go up and down completely randomly.
Pair Corralation between Legg Mason and Capital Group
If you would invest 1,770 in Legg Mason Partners on September 12, 2024 and sell it today you would earn a total of 402.00 from holding Legg Mason Partners or generate 22.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Capital Group Emerging
Performance |
| Timeline |
| Legg Mason Partners |
| Capital Group Emerging |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Legg Mason and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Capital Group
The main advantage of trading using opposite Legg Mason and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group'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 |
| Capital Group vs. Gmo High Yield | Capital Group vs. Blackrock High Yield | Capital Group vs. Artisan High Income | Capital Group vs. Pace High Yield |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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