Correlation Between Legg Mason and Pimco Funds
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Pimco Funds 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 Pimco Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Bw and Pimco Funds , you can compare the effects of market volatilities on Legg Mason and Pimco Funds 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 Pimco Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Pimco Funds.
Diversification Opportunities for Legg Mason and Pimco Funds
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Pimco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Bw and Pimco Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Funds 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 Bw are associated (or correlated) with Pimco Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Funds has no effect on the direction of Legg Mason i.e., Legg Mason and Pimco Funds go up and down completely randomly.
Pair Corralation between Legg Mason and Pimco Funds
If you would invest 1,998 in Legg Mason Bw on December 2, 2024 and sell it today you would earn a total of 119.00 from holding Legg Mason Bw or generate 5.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Legg Mason Bw vs. Pimco Funds
Performance |
Timeline |
Legg Mason Bw |
Pimco Funds |
Legg Mason and Pimco Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Legg Mason and Pimco Funds
The main advantage of trading using opposite Legg Mason and Pimco Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Pimco Funds 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 Pimco Funds will offset losses from the drop in Pimco Funds' long position.Legg Mason vs. T Rowe Price | Legg Mason vs. High Yield Fund Investor | Legg Mason vs. Payden High Income | Legg Mason vs. City National Rochdale |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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