Correlation Between Legg Mason and Polen Small
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Polen Small 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 Polen Small 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 Polen Small, you can compare the effects of market volatilities on Legg Mason and Polen Small 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 Polen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Polen Small.
Diversification Opportunities for Legg Mason and Polen Small
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Legg and Polen is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Polen Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polen Small 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 Polen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polen Small has no effect on the direction of Legg Mason i.e., Legg Mason and Polen Small go up and down completely randomly.
Pair Corralation between Legg Mason and Polen Small
If you would invest 1,406 in Polen Small on September 2, 2024 and sell it today you would earn a total of 190.00 from holding Polen Small or generate 13.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Polen Small
Performance |
| Timeline |
| Legg Mason Partners |
| Polen Small |
Legg Mason and Polen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Polen Small
The main advantage of trading using opposite Legg Mason and Polen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Polen Small 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 Polen Small will offset losses from the drop in Polen Small'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 |
| Polen Small vs. Ashmore Emerging Markets | Polen Small vs. Legg Mason Partners | Polen Small vs. Meeder Funds | Polen Small vs. Dws Government Money |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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