Correlation Between Scharf Global and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Scharf Global 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 Scharf Global and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Legg Mason Global, you can compare the effects of market volatilities on Scharf Global 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 Scharf Global with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Legg Mason.
Diversification Opportunities for Scharf Global and Legg Mason
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scharf and Legg is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Legg Mason Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Global and Scharf Global 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 Scharf Global Opportunity 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 Global has no effect on the direction of Scharf Global i.e., Scharf Global and Legg Mason go up and down completely randomly.
Pair Corralation between Scharf Global and Legg Mason
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 1.75 times more return on investment than Legg Mason. However, Scharf Global is 1.75 times more volatile than Legg Mason Global. It trades about 0.07 of its potential returns per unit of risk. Legg Mason Global is currently generating about 0.05 per unit of risk. If you would invest 3,007 in Scharf Global Opportunity on August 24, 2024 and sell it today you would earn a total of 761.00 from holding Scharf Global Opportunity or generate 25.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Legg Mason Global
Performance |
| Timeline |
| Scharf Global Opportunity |
| Legg Mason Global |
Scharf Global and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Legg Mason
The main advantage of trading using opposite Scharf Global and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global 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.| Scharf Global vs. Us Real Estate | Scharf Global vs. Pender Real Estate | Scharf Global vs. Simt Real Estate | Scharf Global vs. Amg Managers Centersquare |
| Legg Mason vs. Pimco Income Fund | Legg Mason vs. ABIVAX Socit Anonyme | Legg Mason vs. SCOR PK | Legg Mason vs. HUMANA INC |
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 Stocks Directory module to find actively traded stocks across global markets.
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