Leggmason Partners Institutional Fund Volatility
| LTFXX Fund | USD 1.00 0.00 0.00% |
At this stage we consider Leggmason Money Market Fund to be not too volatile. Leggmason Partners has Sharpe Ratio of 0.13, which conveys that the entity had a 0.13% return per unit of risk over the last 3 months. We have found sixteen technical indicators for Leggmason Partners, which you can use to evaluate the volatility of the fund. Please verify Leggmason Partners' Standard Deviation of 0.1243, risk adjusted performance of 0.0427, and Mean Deviation of 0.0301 to check out if the risk estimate we provide is consistent with the expected return of 0.0158%.
Leggmason |
Leggmason Partners Money Market Fund volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Leggmason daily returns, and it is calculated using variance and standard deviation. We also use Leggmason's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Leggmason Partners volatility.
Downward market volatility can be a perfect environment for investors who play the long game with Leggmason Partners. They may decide to buy additional shares of Leggmason Partners at lower prices to lower the average cost per share, thereby improving their portfolio's performance when markets normalize.
Moving against Leggmason Money Market Fund
Leggmason Partners Market Sensitivity And Downside Risk
Leggmason Partners' beta coefficient measures the volatility of Leggmason money market fund compared to the systematic risk of the entire market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Leggmason money market fund's returns against your selected market. In other words, Leggmason Partners's beta of 0.0111 provides an investor with an approximation of how much risk Leggmason Partners money market fund can potentially add to one of your existing portfolios. Leggmason Partners Institutional exhibits very low volatility with skewness of 8.12 and kurtosis of 66.0. Leggmason Partners Institutional is a potential penny fund. Although Leggmason Partners may be in fact a good instrument to invest, many penny money market funds are speculative in nature and are subject to artificial price hype. Please make sure you totally understand the upside potential and downside risk of investing in Leggmason Partners Institutional. We encourage investors to look for signals such as email spams, message board hypes, claims of breakthroughs, volume upswings, sudden news releases, promotions that are not reported, or demotions released before SEC filings. Please also check biographies and work history of current and past company officers before investing in high volatility instruments, penny stocks, or equities with microcap classification. You can indeed make money on Leggmason instrument if you perfectly time your entry and exit. However, remember that penny funds that have been the subject of artificial hype usually unable to maintain their increased share price for more than just a few days. The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed up by solid fundamentals.
3 Months Beta |Analyze Leggmason Partners Demand TrendCheck current 90 days Leggmason Partners correlation with market (Dow Jones Industrial)Leggmason Beta |
Leggmason standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. A typical volatile entity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.
Standard Deviation | 0.13 |
It is essential to understand the difference between upside risk (as represented by Leggmason Partners's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Leggmason Partners' daily returns or price. Since the actual investment returns on holding a position in leggmason money market fund tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Leggmason Partners.
Leggmason Partners Money Market Fund Volatility Analysis
Volatility refers to the frequency at which Leggmason Partners fund price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Leggmason Partners' price changes. Investors will then calculate the volatility of Leggmason Partners' money market fund to predict their future moves. A fund that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A money market fund with relatively stable price changes has low volatility. A highly volatile fund is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Leggmason Partners' volatility:
Historical Volatility
This type of fund volatility measures Leggmason Partners' fluctuations based on previous trends. It's commonly used to predict Leggmason Partners' future behavior based on its past. However, it cannot conclusively determine the future direction of the money market fund.Implied Volatility
This type of volatility provides a positive outlook on future price fluctuations for Leggmason Partners' current market price. This means that the fund will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Leggmason Partners' to be redeemed at a future date.Transformation |
The output start index for this execution was zero with a total number of output elements of sixty-one. Leggmason Partners Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
Leggmason Partners Projected Return Density Against Market
Assuming the 90 days horizon Leggmason Partners has a beta of 0.0111 . This indicates as returns on the market go up, Leggmason Partners average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Leggmason Partners Institutional will be expected to be much smaller as well.Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Leggmason Partners or Commodities Funds sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Leggmason Partners' price will be affected by overall money market fund market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Leggmason fund's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
Leggmason Partners Institutional has an alpha of 0.004, implying that it can generate a 0.004 percent excess return over Dow Jones Industrial after adjusting for the inherited market risk (beta). Predicted Return Density |
| Returns |
What Drives a Leggmason Partners Price Volatility?
Several factors can influence a fund's market volatility:Industry
Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.Political and Economic environment
When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.The Company's Performance
Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.Leggmason Partners Money Market Fund Risk Measures
Assuming the 90 days horizon the coefficient of variation of Leggmason Partners is 800.0. The daily returns are distributed with a variance of 0.02 and standard deviation of 0.13. The mean deviation of Leggmason Partners Institutional is currently at 0.03. For similar time horizon, the selected benchmark (Dow Jones Industrial) has volatility of 0.77
α | Alpha over Dow Jones | 0 | |
β | Beta against Dow Jones | 0.01 | |
σ | Overall volatility | 0.13 | |
Ir | Information ratio | -0.93 |
Leggmason Partners Money Market Fund Return Volatility
Leggmason Partners historical daily return volatility represents how much of Leggmason Partners fund's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The fund shows 0.1263% volatility of returns over 90 . By contrast, Dow Jones Industrial accepts 0.7762% volatility on return distribution over the 90 days horizon. Performance |
| Timeline |
About Leggmason Partners Volatility
Volatility is a rate at which the price of Leggmason Partners or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Leggmason Partners may increase or decrease. In other words, similar to Leggmason's beta indicator, it measures the risk of Leggmason Partners and helps estimate the fluctuations that may happen in a short period of time. So if prices of Leggmason Partners fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.3 ways to utilize Leggmason Partners' volatility to invest better
Higher Leggmason Partners' fund volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Leggmason Partners fund is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Leggmason Partners fund volatility can provide helpful information for making investment decisions in the following ways:- Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Leggmason Partners investment. A higher volatility means higher risk and potentially larger changes in value.
- Identifying Opportunities: High volatility in Leggmason Partners' fund can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
- Diversification: Understanding how the volatility of Leggmason Partners' fund relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Leggmason Partners Investment Opportunity
Dow Jones Industrial has a standard deviation of returns of 0.78 and is 6.0 times more volatile than Leggmason Partners Institutional. 1 percent of all equities and portfolios are less risky than Leggmason Partners. You can use Leggmason Partners Institutional to protect your portfolios against small market fluctuations. The money market fund experiences a normal downward trend, but the immediate impact on correlations cannot be determined at the moment . Check odds of Leggmason Partners to be traded at $0.99 in 90 days.Significant diversification
The correlation between Leggmason Partners Institution and DJI is 0.07 (i.e., Significant diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and DJI in the same portfolio, assuming nothing else is changed.
Leggmason Partners Additional Risk Indicators
The analysis of Leggmason Partners' secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Leggmason Partners' investment and either accepting that risk or mitigating it. Along with some common measures of Leggmason Partners money market fund's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
| Risk Adjusted Performance | 0.0427 | |||
| Market Risk Adjusted Performance | 0.4879 | |||
| Mean Deviation | 0.0301 | |||
| Coefficient Of Variation | 812.4 | |||
| Standard Deviation | 0.1243 | |||
| Variance | 0.0155 | |||
| Information Ratio | (0.93) |
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential money market funds, we recommend comparing similar funds with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.
Leggmason Partners Suggested Diversification Pairs
Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Leggmason Partners as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Leggmason Partners' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Leggmason Partners' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Leggmason Partners Institutional.
Other Information on Investing in Leggmason Money Market Fund
Leggmason Partners financial ratios help investors to determine whether Leggmason Money Market Fund is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Leggmason with respect to the benefits of owning Leggmason Partners security.
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