Correlation Between Legg Mason and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Ashmore Emerging 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 Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on Legg Mason and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Ashmore Emerging.
Diversification Opportunities for Legg Mason and Ashmore Emerging
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Legg and Ashmore is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Legg Mason i.e., Legg Mason and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Legg Mason and Ashmore Emerging
If you would invest 100.00 in Legg Mason Partners on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Legg Mason Partners or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Legg Mason Partners |
| Ashmore Emerging Markets |
Legg Mason and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Ashmore Emerging
The main advantage of trading using opposite Legg Mason and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging'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 |
| Ashmore Emerging vs. Ab Discovery Value | Ashmore Emerging vs. Applied Finance Explorer | Ashmore Emerging vs. Vanguard Small Cap Value | Ashmore Emerging vs. Boston Partners Small |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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