Correlation Between 1290 Gamco and Legg Mason
Can any of the company-specific risk be diversified away by investing in both 1290 Gamco 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 1290 Gamco and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1290 Gamco Smallmid and Legg Mason Partners, you can compare the effects of market volatilities on 1290 Gamco 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 1290 Gamco with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1290 Gamco and Legg Mason.
Diversification Opportunities for 1290 Gamco and Legg Mason
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 1290 and Legg is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding 1290 Gamco Smallmid 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 1290 Gamco 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 1290 Gamco Smallmid 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 1290 Gamco i.e., 1290 Gamco and Legg Mason go up and down completely randomly.
Pair Corralation between 1290 Gamco and Legg Mason
Assuming the 90 days horizon 1290 Gamco Smallmid is expected to generate 1.84 times more return on investment than Legg Mason. However, 1290 Gamco is 1.84 times more volatile than Legg Mason Partners. It trades about 0.05 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.05 per unit of risk. If you would invest 1,476 in 1290 Gamco Smallmid on September 3, 2024 and sell it today you would earn a total of 409.00 from holding 1290 Gamco Smallmid or generate 27.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1290 Gamco Smallmid vs. Legg Mason Partners
Performance |
| Timeline |
| 1290 Gamco Smallmid |
| Legg Mason Partners |
1290 Gamco and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1290 Gamco and Legg Mason
The main advantage of trading using opposite 1290 Gamco and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1290 Gamco 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.| 1290 Gamco vs. Calamos Dynamic Convertible | 1290 Gamco vs. Fidelity Sai Convertible | 1290 Gamco vs. Advent Claymore Convertible | 1290 Gamco vs. Rationalpier 88 Convertible |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |