Correlation Between Legg Mason and Saat Market
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Saat Market 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 Saat Market 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 Saat Market Growth, you can compare the effects of market volatilities on Legg Mason and Saat Market 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 Saat Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Saat Market.
Diversification Opportunities for Legg Mason and Saat Market
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Legg and Saat is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Saat Market Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Market Growth 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 Saat Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Market Growth has no effect on the direction of Legg Mason i.e., Legg Mason and Saat Market go up and down completely randomly.
Pair Corralation between Legg Mason and Saat Market
If you would invest 1,285 in Saat Market Growth on September 5, 2024 and sell it today you would earn a total of 26.00 from holding Saat Market Growth or generate 2.02% 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. Saat Market Growth
Performance |
| Timeline |
| Legg Mason Partners |
| Saat Market Growth |
Legg Mason and Saat Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Saat Market
The main advantage of trading using opposite Legg Mason and Saat Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Saat Market 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 Saat Market will offset losses from the drop in Saat Market'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 |
| Saat Market vs. Legg Mason Partners | Saat Market vs. Versatile Bond Portfolio | Saat Market vs. Lind Capital Partners | Saat Market vs. T Rowe Price |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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