Correlation Between Legg Mason and Doubleline Global
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Doubleline Global 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 Doubleline Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason Global and Doubleline Global Bond, you can compare the effects of market volatilities on Legg Mason and Doubleline Global 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 Doubleline Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Doubleline Global.
Diversification Opportunities for Legg Mason and Doubleline Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Legg and Doubleline is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Global and Doubleline Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doubleline Global Bond 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 Global are associated (or correlated) with Doubleline Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doubleline Global Bond has no effect on the direction of Legg Mason i.e., Legg Mason and Doubleline Global go up and down completely randomly.
Pair Corralation between Legg Mason and Doubleline Global
Assuming the 90 days horizon Legg Mason is expected to generate 1.29 times less return on investment than Doubleline Global. But when comparing it to its historical volatility, Legg Mason Global is 1.35 times less risky than Doubleline Global. It trades about 0.15 of its potential returns per unit of risk. Doubleline Global Bond is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 823.00 in Doubleline Global Bond on December 30, 2024 and sell it today you would earn a total of 21.00 from holding Doubleline Global Bond or generate 2.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Legg Mason Global vs. Doubleline Global Bond
Performance |
Timeline |
Legg Mason Global |
Doubleline Global Bond |
Legg Mason and Doubleline Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Legg Mason and Doubleline Global
The main advantage of trading using opposite Legg Mason and Doubleline Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Doubleline Global 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 Doubleline Global will offset losses from the drop in Doubleline Global's long position.Legg Mason vs. Aam Select Income | Legg Mason vs. Materials Portfolio Fidelity | Legg Mason vs. Flakqx | Legg Mason vs. T Rowe Price |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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