Correlation Between Legg Mason and Bbh Trust
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Bbh Trust 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 Bbh Trust 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 Bbh Trust , you can compare the effects of market volatilities on Legg Mason and Bbh Trust 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 Bbh Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Bbh Trust.
Diversification Opportunities for Legg Mason and Bbh Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Bbh is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Bbh Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Trust 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 Bbh Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Trust has no effect on the direction of Legg Mason i.e., Legg Mason and Bbh Trust go up and down completely randomly.
Pair Corralation between Legg Mason and Bbh Trust
Assuming the 90 days horizon Legg Mason is expected to generate 81.49 times less return on investment than Bbh Trust. But when comparing it to its historical volatility, Legg Mason Partners is 206.19 times less risky than Bbh Trust. It trades about 0.13 of its potential returns per unit of risk. Bbh Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 96.00 in Bbh Trust on September 2, 2024 and sell it today you would earn a total of 4.00 from holding Bbh Trust or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.02% |
| Values | Daily Returns |
Legg Mason Partners vs. Bbh Trust
Performance |
| Timeline |
| Legg Mason Partners |
| Bbh Trust |
Legg Mason and Bbh Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Bbh Trust
The main advantage of trading using opposite Legg Mason and Bbh Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Bbh Trust 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 Bbh Trust will offset losses from the drop in Bbh Trust'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 |
| Bbh Trust vs. Vanguard Total Stock | Bbh Trust vs. Vanguard 500 Index | Bbh Trust vs. Vanguard Total Stock | Bbh Trust vs. Vanguard Total Stock |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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