Correlation Between Virtus Nfj and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Virtus Nfj 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 Virtus Nfj and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Nfj Large Cap and Legg Mason Bw, you can compare the effects of market volatilities on Virtus Nfj 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 Virtus Nfj with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Nfj and Legg Mason.
Diversification Opportunities for Virtus Nfj and Legg Mason
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and Legg is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Nfj Large Cap and Legg Mason Bw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Bw and Virtus Nfj 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 Virtus Nfj Large Cap 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 Bw has no effect on the direction of Virtus Nfj i.e., Virtus Nfj and Legg Mason go up and down completely randomly.
Pair Corralation between Virtus Nfj and Legg Mason
Assuming the 90 days horizon Virtus Nfj is expected to generate 1.52 times less return on investment than Legg Mason. But when comparing it to its historical volatility, Virtus Nfj Large Cap is 1.19 times less risky than Legg Mason. It trades about 0.13 of its potential returns per unit of risk. Legg Mason Bw is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,191 in Legg Mason Bw on September 2, 2024 and sell it today you would earn a total of 189.00 from holding Legg Mason Bw or generate 8.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Nfj Large Cap vs. Legg Mason Bw
Performance |
| Timeline |
| Virtus Nfj Large |
| Legg Mason Bw |
Virtus Nfj and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Nfj and Legg Mason
The main advantage of trading using opposite Virtus Nfj and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Nfj 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.| Virtus Nfj vs. Lord Abbett Health | Virtus Nfj vs. Hartford Healthcare Hls | Virtus Nfj vs. Eventide Healthcare Life | Virtus Nfj vs. Alphacentric Lifesci Healthcare |
| Legg Mason vs. Franklin Mutual Beacon | Legg Mason vs. Templeton Developing Markets | Legg Mason vs. Franklin Mutual Global | Legg Mason vs. Franklin Mutual Global |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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