Correlation Between Legg Mason and Gold
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Gold 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 Gold 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 Gold And Precious, you can compare the effects of market volatilities on Legg Mason and Gold 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 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Gold.
Diversification Opportunities for Legg Mason and Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Gold is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Gold And Precious in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold And Precious 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 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold And Precious has no effect on the direction of Legg Mason i.e., Legg Mason and Gold go up and down completely randomly.
Pair Corralation between Legg Mason and Gold
If you would invest 1,257 in Gold And Precious on September 12, 2024 and sell it today you would earn a total of 27.00 from holding Gold And Precious or generate 2.15% 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. Gold And Precious
Performance |
| Timeline |
| Legg Mason Partners |
| Gold And Precious |
Legg Mason and Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Gold
The main advantage of trading using opposite Legg Mason and Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Gold 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 Gold will offset losses from the drop in Gold's long position.| Legg Mason vs. Dreyfus Natural Resources | Legg Mason vs. Goehring Rozencwajg Resources | Legg Mason vs. Thrivent Natural Resources | Legg Mason vs. Tortoise Energy Independence |
| Gold vs. Artisan Thematic Fund | Gold vs. Auer Growth Fund | Gold vs. Balanced Fund Investor | Gold vs. Nasdaq 100 Index Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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