Correlation Between Legg Mason and Jpmorgan
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Jpmorgan 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 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 Equity Fund, you can compare the effects of market volatilities on Legg Mason and Jpmorgan 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. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Jpmorgan.
Diversification Opportunities for Legg Mason and Jpmorgan
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Jpmorgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Jpmorgan Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity 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. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity has no effect on the direction of Legg Mason i.e., Legg Mason and Jpmorgan go up and down completely randomly.
Pair Corralation between Legg Mason and Jpmorgan
If you would invest 100.00 in Legg Mason Partners on December 2, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Jpmorgan Equity Fund
Performance |
| Timeline |
| Legg Mason Partners |
| Jpmorgan Equity |
Legg Mason and Jpmorgan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Jpmorgan
The main advantage of trading using opposite Legg Mason and Jpmorgan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Jpmorgan 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 will offset losses from the drop in Jpmorgan's long position.The idea behind Legg Mason Partners and Jpmorgan Equity Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Jpmorgan vs. Artisan High Income | Jpmorgan vs. Buffalo High Yield | Jpmorgan vs. Siit High Yield | Jpmorgan vs. Mainstay High Yield |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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