Correlation Between Legg Mason and Quantified Managed
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Quantified Managed 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 Legg Mason and Quantified Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Partners and Quantified Managed Income, you can compare the effects of market volatilities on Legg Mason and Quantified Managed 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 Legg Mason with a short position of Quantified Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Quantified Managed.
Diversification Opportunities for Legg Mason and Quantified Managed
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Quantified is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Quantified Managed Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantified Managed Income and Legg Mason 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 Legg Mason Partners are associated (or correlated) with Quantified Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantified Managed Income has no effect on the direction of Legg Mason i.e., Legg Mason and Quantified Managed go up and down completely randomly.
Pair Corralation between Legg Mason and Quantified Managed
Assuming the 90 days horizon Legg Mason is expected to generate 1.06 times less return on investment than Quantified Managed. But when comparing it to its historical volatility, Legg Mason Partners is 2.35 times less risky than Quantified Managed. It trades about 0.13 of its potential returns per unit of risk. Quantified Managed Income is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 811.00 in Quantified Managed Income on September 8, 2024 and sell it today you would earn a total of 35.00 from holding Quantified Managed Income or generate 4.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Legg Mason Partners vs. Quantified Managed Income
Performance |
Timeline |
Legg Mason Partners |
Quantified Managed Income |
Legg Mason and Quantified Managed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Legg Mason and Quantified Managed
The main advantage of trading using opposite Legg Mason and Quantified Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Quantified Managed 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 Quantified Managed will offset losses from the drop in Quantified Managed's long position.Legg Mason vs. The Hartford Municipal | Legg Mason vs. Morningstar Municipal Bond | Legg Mason vs. T Rowe Price | Legg Mason vs. Transamerica Intermediate Muni |
Quantified Managed vs. Virtus Convertible | Quantified Managed vs. Advent Claymore Convertible | Quantified Managed vs. Calamos Dynamic Convertible | Quantified Managed vs. Absolute Convertible Arbitrage |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |