Correlation Between Legg Mason and Dreyfusstandish Global
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Dreyfusstandish Global 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 Dreyfusstandish Global 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 Dreyfusstandish Global Fixed, you can compare the effects of market volatilities on Legg Mason and Dreyfusstandish Global 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 Dreyfusstandish Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Dreyfusstandish Global.
Diversification Opportunities for Legg Mason and Dreyfusstandish Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Dreyfusstandish is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Dreyfusstandish Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfusstandish Global 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 Dreyfusstandish Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfusstandish Global has no effect on the direction of Legg Mason i.e., Legg Mason and Dreyfusstandish Global go up and down completely randomly.
Pair Corralation between Legg Mason and Dreyfusstandish Global
Assuming the 90 days horizon Legg Mason is expected to generate 1.36 times less return on investment than Dreyfusstandish Global. But when comparing it to its historical volatility, Legg Mason Partners is 1.81 times less risky than Dreyfusstandish Global. It trades about 0.13 of its potential returns per unit of risk. Dreyfusstandish Global Fixed is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,884 in Dreyfusstandish Global Fixed on September 12, 2024 and sell it today you would earn a total of 107.00 from holding Dreyfusstandish Global Fixed or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Dreyfusstandish Global Fixed
Performance |
| Timeline |
| Legg Mason Partners |
| Dreyfusstandish Global |
Legg Mason and Dreyfusstandish Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Dreyfusstandish Global
The main advantage of trading using opposite Legg Mason and Dreyfusstandish Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Dreyfusstandish Global 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 Dreyfusstandish Global will offset losses from the drop in Dreyfusstandish Global's long position.| Legg Mason vs. Dreyfus Natural Resources | Legg Mason vs. Goehring Rozencwajg Resources | Legg Mason vs. Thrivent Natural Resources | Legg Mason vs. Tortoise Energy Independence |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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