Correlation Between Legg Mason and Jpmorgan Preferred
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Jpmorgan Preferred 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 Jpmorgan Preferred 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 Jpmorgan Preferred And, you can compare the effects of market volatilities on Legg Mason and Jpmorgan Preferred 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 Jpmorgan Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Jpmorgan Preferred.
Diversification Opportunities for Legg Mason and Jpmorgan Preferred
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Legg and Jpmorgan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Jpmorgan Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Preferred And 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 Jpmorgan Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Preferred And has no effect on the direction of Legg Mason i.e., Legg Mason and Jpmorgan Preferred go up and down completely randomly.
Pair Corralation between Legg Mason and Jpmorgan Preferred
If you would invest 969.00 in Jpmorgan Preferred And on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Jpmorgan Preferred And or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Jpmorgan Preferred And
Performance |
| Timeline |
| Legg Mason Partners |
| Jpmorgan Preferred And |
Legg Mason and Jpmorgan Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Jpmorgan Preferred
The main advantage of trading using opposite Legg Mason and Jpmorgan Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Jpmorgan Preferred 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 Jpmorgan Preferred will offset losses from the drop in Jpmorgan Preferred'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 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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