Correlation Between Sterling Capital and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Sterling Capital 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 Sterling Capital and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Stratton and Legg Mason Partners, you can compare the effects of market volatilities on Sterling Capital 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 Sterling Capital with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Legg Mason.
Diversification Opportunities for Sterling Capital and Legg Mason
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sterling and Legg is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners and Sterling Capital 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 Sterling Capital Stratton 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 Partners has no effect on the direction of Sterling Capital i.e., Sterling Capital and Legg Mason go up and down completely randomly.
Pair Corralation between Sterling Capital and Legg Mason
If you would invest 6,786 in Sterling Capital Stratton on August 30, 2024 and sell it today you would earn a total of 336.00 from holding Sterling Capital Stratton or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sterling Capital Stratton vs. Legg Mason Partners
Performance |
| Timeline |
| Sterling Capital Stratton |
| Legg Mason Partners |
Sterling Capital and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Legg Mason
The main advantage of trading using opposite Sterling Capital and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital 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.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South |
| Legg Mason vs. Short Precious Metals | Legg Mason vs. The Gold Bullion | Legg Mason vs. First Eagle Gold | Legg Mason vs. Invesco Gold Special |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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