Correlation Between Stet Tax and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Stet Tax 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 Stet Tax and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet Tax Advantaged Income and Legg Mason Partners, you can compare the effects of market volatilities on Stet Tax 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 Stet Tax with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet Tax and Legg Mason.
Diversification Opportunities for Stet Tax and Legg Mason
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stet and Legg is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Stet Tax Advantaged Income and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners and Stet Tax 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 Stet Tax Advantaged Income 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 Partners has no effect on the direction of Stet Tax i.e., Stet Tax and Legg Mason go up and down completely randomly.
Pair Corralation between Stet Tax and Legg Mason
Assuming the 90 days horizon Stet Tax is expected to generate 1.65 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Stet Tax Advantaged Income is 2.61 times less risky than Legg Mason. It trades about 0.21 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,303 in Legg Mason Partners on September 12, 2024 and sell it today you would earn a total of 13.00 from holding Legg Mason Partners or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Stet Tax Advantaged Income vs. Legg Mason Partners
Performance |
| Timeline |
| Stet Tax Advantaged |
| Legg Mason Partners |
Stet Tax and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet Tax and Legg Mason
The main advantage of trading using opposite Stet Tax and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet Tax 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.| Stet Tax vs. Investec Emerging Markets | Stet Tax vs. Nasdaq 100 2x Strategy | Stet Tax vs. Mid Cap 15x Strategy | Stet Tax vs. Shelton Emerging Markets |
| Legg Mason vs. Transamerica Intermediate Muni | Legg Mason vs. T Rowe Price | Legg Mason vs. T Rowe Price | Legg Mason vs. Bbh Intermediate 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |