Correlation Between Quantified Managed and Legg Mason

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

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

Diversification Opportunities for Quantified Managed and Legg Mason

0.01

Correlation Coefficient

Quantified Managed  Legg Mason

Significant diversification

The 3 months correlation between Quantified and Legg is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Quantified Managed Income 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 Quantified Managed 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 Quantified Managed Income 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 Quantified Managed i.e., Quantified Managed and Legg Mason go up and down completely randomly.

Pair Corralation between Quantified Managed and Legg Mason

If you would invest  834.00  in Quantified Managed Income on September 5, 2024 and sell it today you would earn a total of  13.00  from holding Quantified Managed Income or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Quantified Managed Income  vs.  Legg Mason Partners

Quantified Managed Income

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quantified Managed Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Quantified Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 fairly strong basic indicators, Legg Mason is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Quantified Managed and Legg Mason

The main advantage of trading using opposite Quantified Managed and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantified Managed 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 Quantified Managed Income 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.