Correlation Between Stepstone and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Stepstone and Legg Mason 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 Stepstone and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Legg Mason, you can compare the effects of market volatilities on Stepstone and Legg Mason 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 Stepstone with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Legg Mason.
Diversification Opportunities for Stepstone and Legg Mason
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepstone and Legg is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Legg Mason in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason and Stepstone 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 Stepstone Group are associated (or correlated) with Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason has no effect on the direction of Stepstone i.e., Stepstone and Legg Mason go up and down completely randomly.
Pair Corralation between Stepstone and Legg Mason
If you would invest 2,562 in Stepstone Group on September 4, 2024 and sell it today you would earn a total of 3,918 from holding Stepstone Group or generate 152.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Stepstone Group vs. Legg Mason
Performance |
| Timeline |
| Stepstone Group |
| Legg Mason |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Stepstone and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Legg Mason
The main advantage of trading using opposite Stepstone and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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