Correlation Between Legg Mason and Abrdn Global

Can any of the company-specific risk be diversified away by investing in both Legg Mason and Abrdn 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 Abrdn Global 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 Abrdn Global Infrastructure, you can compare the effects of market volatilities on Legg Mason and Abrdn 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 Abrdn Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Abrdn Global.

Diversification Opportunities for Legg Mason and Abrdn Global

0.0

Correlation Coefficient

Legg Mason  Abrdn Global

Pay attention - limited upside

The 3 months correlation between Legg and Abrdn is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason Partners and Abrdn Global Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abrdn Global Infrast 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 Abrdn Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abrdn Global Infrast has no effect on the direction of Legg Mason i.e., Legg Mason and Abrdn Global go up and down completely randomly.

Pair Corralation between Legg Mason and Abrdn Global

If you would invest  100.00  in Legg Mason Partners on September 13, 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.  Abrdn Global Infrastructure

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.

Abrdn Global Infrast

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Abrdn Global Infrastructure has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Abrdn Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Legg Mason and Abrdn Global

The main advantage of trading using opposite Legg Mason and Abrdn Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Abrdn 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 Abrdn Global will offset losses from the drop in Abrdn Global's long position.

The idea behind Legg Mason Partners and Abrdn Global Infrastructure 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..