Correlation Between Vanguard Target and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Vanguard Target 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 Target 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 Target Retirement and Legg Mason Partners, you can compare the effects of market volatilities on Vanguard Target 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 Target with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Target and Legg Mason.
Diversification Opportunities for Vanguard Target and Legg Mason
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Vanguard and Legg is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Target Retirement 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 Target 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 Target Retirement 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 Target i.e., Vanguard Target and Legg Mason go up and down completely randomly.
Pair Corralation between Vanguard Target and Legg Mason
If you would invest 4,467 in Vanguard Target Retirement on August 30, 2024 and sell it today you would earn a total of 54.00 from holding Vanguard Target Retirement or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Target Retirement vs. Legg Mason Partners
Performance |
| Timeline |
| Vanguard Target Reti |
| Legg Mason Partners |
Vanguard Target and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Target and Legg Mason
The main advantage of trading using opposite Vanguard Target and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Target 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 Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement | Vanguard Target vs. Vanguard Target Retirement |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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