Correlation Between Legg Mason and Pimco Real
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Pimco Real 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 Pimco Real 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 Pimco Real Return, you can compare the effects of market volatilities on Legg Mason and Pimco Real 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 Pimco Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Pimco Real.
Diversification Opportunities for Legg Mason and Pimco Real
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Legg and Pimco is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Pimco Real Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Real Return 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 Pimco Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Real Return has no effect on the direction of Legg Mason i.e., Legg Mason and Pimco Real go up and down completely randomly.
Pair Corralation between Legg Mason and Pimco Real
If you would invest 1,225 in Pimco Real Return on September 1, 2024 and sell it today you would earn a total of 7.00 from holding Pimco Real Return or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Legg Mason Partners vs. Pimco Real Return
Performance |
| Timeline |
| Legg Mason Partners |
| Pimco Real Return |
Legg Mason and Pimco Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Pimco Real
The main advantage of trading using opposite Legg Mason and Pimco Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Pimco Real 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 Pimco Real will offset losses from the drop in Pimco Real'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 |
| Pimco Real vs. Blackrock Moderate Prepared | Pimco Real vs. Multimanager Lifestyle Moderate | Pimco Real vs. Target Retirement 2040 | Pimco Real vs. Tiaa Cref Lifestyle Moderate |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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