Correlation Between Legg Mason and Mainstay Winslow
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Mainstay Winslow 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 Winslow 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 Winslow Large, you can compare the effects of market volatilities on Legg Mason and Mainstay Winslow 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 Winslow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Mainstay Winslow.
Diversification Opportunities for Legg Mason and Mainstay Winslow
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Mainstay is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Mainstay Winslow Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Winslow Large 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 Winslow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Winslow Large has no effect on the direction of Legg Mason i.e., Legg Mason and Mainstay Winslow go up and down completely randomly.
Pair Corralation between Legg Mason and Mainstay Winslow
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 1.3 times more return on investment than Mainstay Winslow. However, Legg Mason is 1.3 times more volatile than Mainstay Winslow Large. It trades about 0.29 of its potential returns per unit of risk. Mainstay Winslow Large is currently generating about 0.12 per unit of risk. If you would invest 2,604 in Legg Mason Partners on August 31, 2024 and sell it today you would earn a total of 266.00 from holding Legg Mason Partners or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Mainstay Winslow Large
Performance |
| Timeline |
| Legg Mason Partners |
| Mainstay Winslow Large |
Legg Mason and Mainstay Winslow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Mainstay Winslow
The main advantage of trading using opposite Legg Mason and Mainstay Winslow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Mainstay Winslow 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 Winslow will offset losses from the drop in Mainstay Winslow's long position.| Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
| Mainstay Winslow vs. Ab Small Cap | Mainstay Winslow vs. Growth Opportunities Fund | Mainstay Winslow vs. Legg Mason Partners | Mainstay Winslow vs. Small Pany Growth |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |