Correlation Between Legg Mason and Pimco Investment
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Pimco Investment 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 Investment 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 Pimco Investment Grade, you can compare the effects of market volatilities on Legg Mason and Pimco Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Pimco Investment.
Diversification Opportunities for Legg Mason and Pimco Investment
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 Partners and Pimco Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Investment Grade 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 Pimco Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Investment Grade has no effect on the direction of Legg Mason i.e., Legg Mason and Pimco Investment go up and down completely randomly.
Pair Corralation between Legg Mason and Pimco Investment
If you would invest 877.00 in Pimco Investment Grade on December 27, 2024 and sell it today you would earn a total of 23.00 from holding Pimco Investment Grade or generate 2.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Legg Mason Partners vs. Pimco Investment Grade
Performance |
Timeline |
Legg Mason Partners |
Pimco Investment Grade |
Legg Mason and Pimco Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Legg Mason and Pimco Investment
The main advantage of trading using opposite Legg Mason and Pimco Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Pimco Investment 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 Investment will offset losses from the drop in Pimco Investment's long position.Legg Mason vs. Edward Jones Money | Legg Mason vs. Prudential Financial Services | Legg Mason vs. Financial Industries Fund | Legg Mason vs. Davis Financial Fund |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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