Correlation Between Legg Mason and Guidemark(r) Small/mid
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Guidemark(r) Small/mid 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 Guidemark(r) Small/mid 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 Guidemark Smallmid Cap, you can compare the effects of market volatilities on Legg Mason and Guidemark(r) Small/mid 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 Guidemark(r) Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Guidemark(r) Small/mid.
Diversification Opportunities for Legg Mason and Guidemark(r) Small/mid
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Legg and Guidemark(r) is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Guidemark Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Smallmid Cap 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 Guidemark(r) Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Smallmid Cap has no effect on the direction of Legg Mason i.e., Legg Mason and Guidemark(r) Small/mid go up and down completely randomly.
Pair Corralation between Legg Mason and Guidemark(r) Small/mid
If you would invest 2,105 in Guidemark Smallmid Cap on August 30, 2024 and sell it today you would earn a total of 186.00 from holding Guidemark Smallmid Cap or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Legg Mason Partners vs. Guidemark Smallmid Cap
Performance |
| Timeline |
| Legg Mason Partners |
| Guidemark Smallmid Cap |
Legg Mason and Guidemark(r) Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Guidemark(r) Small/mid
The main advantage of trading using opposite Legg Mason and Guidemark(r) Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Guidemark(r) Small/mid 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 Guidemark(r) Small/mid will offset losses from the drop in Guidemark(r) Small/mid's long position.| Legg Mason vs. Short Precious Metals | Legg Mason vs. The Gold Bullion | Legg Mason vs. First Eagle Gold | Legg Mason vs. Invesco Gold Special |
| Guidemark(r) Small/mid vs. T Rowe Price | Guidemark(r) Small/mid vs. Multisector Bond Sma | Guidemark(r) Small/mid vs. Blrc Sgy Mnp | Guidemark(r) Small/mid vs. Astor Longshort 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |