Correlation Between Legg Mason and Voya Gnma
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Voya Gnma 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 Voya Gnma 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 Voya Gnma Income, you can compare the effects of market volatilities on Legg Mason and Voya Gnma 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 Voya Gnma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Voya Gnma.
Diversification Opportunities for Legg Mason and Voya Gnma
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Legg and Voya is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Voya Gnma Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Gnma Income 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 Voya Gnma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Gnma Income has no effect on the direction of Legg Mason i.e., Legg Mason and Voya Gnma go up and down completely randomly.
Pair Corralation between Legg Mason and Voya Gnma
If you would invest 734.00 in Voya Gnma Income on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Voya Gnma Income or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Legg Mason Partners vs. Voya Gnma Income
Performance |
| Timeline |
| Legg Mason Partners |
| Voya Gnma Income |
Legg Mason and Voya Gnma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Voya Gnma
The main advantage of trading using opposite Legg Mason and Voya Gnma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Voya Gnma 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 Voya Gnma will offset losses from the drop in Voya Gnma'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 |
| Voya Gnma vs. Voya Bond Index | Voya Gnma vs. Voya Bond Index | Voya Gnma vs. Voya Limited Maturity | Voya Gnma vs. Voya Limited Maturity |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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