Correlation Between Legg Mason and Artisan High
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Artisan High 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 Artisan High 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 Artisan High Income, you can compare the effects of market volatilities on Legg Mason and Artisan High 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 Artisan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Artisan High.
Diversification Opportunities for Legg Mason and Artisan High
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Artisan is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Artisan High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan High Income 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 Artisan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan High Income has no effect on the direction of Legg Mason i.e., Legg Mason and Artisan High go up and down completely randomly.
Pair Corralation between Legg Mason and Artisan High
Assuming the 90 days trading horizon Legg Mason is expected to generate 1.29 times less return on investment than Artisan High. In addition to that, Legg Mason is 2.07 times more volatile than Artisan High Income. It trades about 0.05 of its total potential returns per unit of risk. Artisan High Income is currently generating about 0.14 per unit of volatility. If you would invest 747.00 in Artisan High Income on September 2, 2024 and sell it today you would earn a total of 170.00 from holding Artisan High Income or generate 22.76% 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. Artisan High Income
Performance |
| Timeline |
| Legg Mason Partners |
| Artisan High Income |
Legg Mason and Artisan High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Artisan High
The main advantage of trading using opposite Legg Mason and Artisan High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Artisan High 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 Artisan High will offset losses from the drop in Artisan High'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 |
| Artisan High vs. Small Midcap Dividend Income | Artisan High vs. Chartwell Small Cap | Artisan High vs. The Hartford Small | Artisan High vs. Touchstone Small Cap |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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