Correlation Between Legg Mason and Touchstone Premium
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Touchstone Premium 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 Touchstone Premium 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 Touchstone Premium Yield, you can compare the effects of market volatilities on Legg Mason and Touchstone Premium 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 Touchstone Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Touchstone Premium.
Diversification Opportunities for Legg Mason and Touchstone Premium
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Touchstone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Touchstone Premium Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Premium Yield 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 Touchstone Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Premium Yield has no effect on the direction of Legg Mason i.e., Legg Mason and Touchstone Premium go up and down completely randomly.
Pair Corralation between Legg Mason and Touchstone Premium
If you would invest 100.00 in Legg Mason Partners on December 2, 2024 and sell it today you would earn a total of 0.00 from holding Legg Mason Partners or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Legg Mason Partners vs. Touchstone Premium Yield
Performance |
Timeline |
Legg Mason Partners |
Touchstone Premium Yield |
Legg Mason and Touchstone Premium Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Legg Mason and Touchstone Premium
The main advantage of trading using opposite Legg Mason and Touchstone Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Touchstone Premium 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 Touchstone Premium will offset losses from the drop in Touchstone Premium's long position.Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard 500 Index | Legg Mason vs. Vanguard Total Stock | Legg Mason vs. Vanguard Total Stock |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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