Correlation Between Pgim Securitized and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Pgim Securitized and Legg Mason 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 Pgim Securitized and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pgim Securitized Credit and Legg Mason Bw, you can compare the effects of market volatilities on Pgim Securitized and Legg Mason 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 Pgim Securitized with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pgim Securitized and Legg Mason.
Diversification Opportunities for Pgim Securitized and Legg Mason
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pgim and Legg is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pgim Securitized Credit and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw and Pgim Securitized 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 Pgim Securitized Credit are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Bw has no effect on the direction of Pgim Securitized i.e., Pgim Securitized and Legg Mason go up and down completely randomly.
Pair Corralation between Pgim Securitized and Legg Mason
Assuming the 90 days horizon Pgim Securitized is expected to generate 5.91 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Pgim Securitized Credit is 7.18 times less risky than Legg Mason. It trades about 0.21 of its potential returns per unit of risk. Legg Mason Bw is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,196 in Legg Mason Bw on September 2, 2024 and sell it today you would earn a total of 192.00 from holding Legg Mason Bw or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pgim Securitized Credit vs. Legg Mason Bw
Performance |
| Timeline |
| Pgim Securitized Credit |
| Legg Mason Bw |
Pgim Securitized and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pgim Securitized and Legg Mason
The main advantage of trading using opposite Pgim Securitized and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pgim Securitized position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.The idea behind Pgim Securitized Credit and Legg Mason Bw pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Legg Mason vs. Clearbridge Aggressive Growth | Legg Mason vs. Clearbridge Small Cap | Legg Mason vs. Qs International Equity | Legg Mason vs. Clearbridge Appreciation Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |