Correlation Between Vanguard Explorer and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer 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 Vanguard Explorer and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Explorer Fund and Legg Mason Partners, you can compare the effects of market volatilities on Vanguard Explorer 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 Vanguard Explorer with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and Legg Mason.
Diversification Opportunities for Vanguard Explorer and Legg Mason
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VANGUARD and Legg is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Fund 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 Vanguard Explorer 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 Vanguard Explorer Fund 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 Vanguard Explorer i.e., Vanguard Explorer and Legg Mason go up and down completely randomly.
Pair Corralation between Vanguard Explorer and Legg Mason
If you would invest 11,444 in Vanguard Explorer Fund on August 30, 2024 and sell it today you would earn a total of 803.00 from holding Vanguard Explorer Fund or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Explorer Fund vs. Legg Mason Partners
Performance |
| Timeline |
| Vanguard Explorer |
| Legg Mason Partners |
Vanguard Explorer and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Explorer and Legg Mason
The main advantage of trading using opposite Vanguard Explorer and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer 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.| Vanguard Explorer vs. Vanguard International Growth | Vanguard Explorer vs. Vanguard Windsor Ii | Vanguard Explorer vs. Vanguard Primecap Fund | Vanguard Explorer vs. Vanguard Growth Fund |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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