Correlation Between Atac Inflation and Legg Mason

Can any of the company-specific risk be diversified away by investing in both Atac Inflation 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 Atac Inflation and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atac Inflation Rotation and Legg Mason Partners, you can compare the effects of market volatilities on Atac Inflation 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 Atac Inflation with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atac Inflation and Legg Mason.

Diversification Opportunities for Atac Inflation and Legg Mason

0.15

Correlation Coefficient

Atac Inflation  Legg Mason

Average diversification

The 3 months correlation between Atac and Legg is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Atac Inflation Rotation 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 Atac Inflation 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 Atac Inflation Rotation 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 Atac Inflation i.e., Atac Inflation and Legg Mason go up and down completely randomly.

Pair Corralation between Atac Inflation and Legg Mason

Assuming the 90 days horizon Atac Inflation Rotation is expected to under-perform the Legg Mason. But the mutual fund apears to be less risky and, when comparing its historical volatility, Atac Inflation Rotation is 1.08 times less risky than Legg Mason. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Legg Mason Partners is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  2,144  in Legg Mason Partners on October 23, 2024 and sell it today you would earn a total of  28.00  from holding Legg Mason Partners or generate 1.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Atac Inflation Rotation  vs.  Legg Mason Partners

Atac Inflation Rotation

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Atac Inflation Rotation are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Atac Inflation may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Legg Mason Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Legg Mason Partners has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Atac Inflation and Legg Mason

The main advantage of trading using opposite Atac Inflation and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atac Inflation 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.

The idea behind Atac Inflation Rotation and Legg Mason Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.