Correlation Between Legg Mason and Ivy Asset
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Ivy Asset 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 Ivy Asset 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 Ivy Asset Strategy, you can compare the effects of market volatilities on Legg Mason and Ivy Asset 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 Ivy Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Ivy Asset.
Diversification Opportunities for Legg Mason and Ivy Asset
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Legg and Ivy is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Ivy Asset Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Asset Strategy 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 Ivy Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Asset Strategy has no effect on the direction of Legg Mason i.e., Legg Mason and Ivy Asset go up and down completely randomly.
Pair Corralation between Legg Mason and Ivy Asset
Assuming the 90 days trading horizon Legg Mason Partners is expected to generate 0.82 times more return on investment than Ivy Asset. However, Legg Mason Partners is 1.23 times less risky than Ivy Asset. It trades about 0.1 of its potential returns per unit of risk. Ivy Asset Strategy is currently generating about 0.06 per unit of risk. If you would invest 1,191 in Legg Mason Partners on October 5, 2024 and sell it today you would earn a total of 191.00 from holding Legg Mason Partners or generate 16.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.63% |
Values | Daily Returns |
Legg Mason Partners vs. Ivy Asset Strategy
Performance |
Timeline |
Legg Mason Partners |
Ivy Asset Strategy |
Legg Mason and Ivy Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Legg Mason and Ivy Asset
The main advantage of trading using opposite Legg Mason and Ivy Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Ivy Asset 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 Ivy Asset will offset losses from the drop in Ivy Asset's long position.Legg Mason vs. International Investors Gold | Legg Mason vs. Fidelity Advisor Gold | Legg Mason vs. Vy Goldman Sachs | Legg Mason vs. Great West Goldman Sachs |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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