Correlation Between Tiaa-cref Lifecycle and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Tiaa-cref Lifecycle 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 Tiaa-cref Lifecycle and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiaa Cref Lifecycle Index and Legg Mason Partners, you can compare the effects of market volatilities on Tiaa-cref Lifecycle 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 Tiaa-cref Lifecycle with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiaa-cref Lifecycle and Legg Mason.
Diversification Opportunities for Tiaa-cref Lifecycle and Legg Mason
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tiaa-cref and Legg is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Tiaa Cref Lifecycle Index 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 Tiaa-cref Lifecycle 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 Tiaa Cref Lifecycle Index 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 Tiaa-cref Lifecycle i.e., Tiaa-cref Lifecycle and Legg Mason go up and down completely randomly.
Pair Corralation between Tiaa-cref Lifecycle and Legg Mason
Assuming the 90 days horizon Tiaa-cref Lifecycle is expected to generate 2.54 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Tiaa Cref Lifecycle Index is 2.54 times less risky than Legg Mason. It trades about 0.1 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,467 in Legg Mason Partners on September 3, 2024 and sell it today you would earn a total of 416.00 from holding Legg Mason Partners or generate 16.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tiaa Cref Lifecycle Index vs. Legg Mason Partners
Performance |
| Timeline |
| Tiaa Cref Lifecycle |
| Legg Mason Partners |
Tiaa-cref Lifecycle and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tiaa-cref Lifecycle and Legg Mason
The main advantage of trading using opposite Tiaa-cref Lifecycle and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiaa-cref Lifecycle 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.| Tiaa-cref Lifecycle vs. Ab Select Equity | Tiaa-cref Lifecycle vs. Artisan Select Equity | Tiaa-cref Lifecycle vs. Small Cap Equity | Tiaa-cref Lifecycle vs. Scharf Fund Retail |
| Legg Mason vs. Hennessy Nerstone Mid | Legg Mason vs. Fpa Queens Road | Legg Mason vs. American Century Etf | Legg Mason vs. Columbia Small Cap |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stocks Directory Find actively traded stocks across global markets |