Correlation Between Transamerica Intermediate and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Transamerica Intermediate 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 Transamerica Intermediate and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Intermediate Muni and Legg Mason Partners, you can compare the effects of market volatilities on Transamerica Intermediate 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 Transamerica Intermediate with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Intermediate and Legg Mason.
Diversification Opportunities for Transamerica Intermediate and Legg Mason
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transamerica and Legg is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Intermediate Muni 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 Transamerica Intermediate 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 Transamerica Intermediate Muni 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 Transamerica Intermediate i.e., Transamerica Intermediate and Legg Mason go up and down completely randomly.
Pair Corralation between Transamerica Intermediate and Legg Mason
Assuming the 90 days horizon Transamerica Intermediate Muni is expected to generate 0.37 times more return on investment than Legg Mason. However, Transamerica Intermediate Muni is 2.71 times less risky than Legg Mason. It trades about 0.49 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.17 per unit of risk. If you would invest 1,076 in Transamerica Intermediate Muni on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Transamerica Intermediate Muni or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Intermediate Muni vs. Legg Mason Partners
Performance |
| Timeline |
| Transamerica Intermediate |
| Legg Mason Partners |
Transamerica Intermediate and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Intermediate and Legg Mason
The main advantage of trading using opposite Transamerica Intermediate and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Intermediate 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.| Transamerica Intermediate vs. Champlain Mid Cap | Transamerica Intermediate vs. Praxis Growth Index | Transamerica Intermediate vs. Artisan Small Cap | Transamerica Intermediate vs. Chase Growth Fund |
| Legg Mason vs. Issachar Fund Class | Legg Mason vs. T Rowe Price | Legg Mason vs. Volumetric Fund Volumetric | Legg Mason 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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