Correlation Between Barings Active and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Barings Active 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 Barings Active and Legg Mason into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Active Short and Legg Mason Global, you can compare the effects of market volatilities on Barings Active 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 Barings Active with a short position of Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Active and Legg Mason.
Diversification Opportunities for Barings Active and Legg Mason
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Barings and Legg is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Barings Active Short and Legg Mason Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Global and Barings Active 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 Barings Active Short 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 Global has no effect on the direction of Barings Active i.e., Barings Active and Legg Mason go up and down completely randomly.
Pair Corralation between Barings Active and Legg Mason
Assuming the 90 days horizon Barings Active Short is expected to generate 0.49 times more return on investment than Legg Mason. However, Barings Active Short is 2.03 times less risky than Legg Mason. It trades about 0.05 of its potential returns per unit of risk. Legg Mason Global is currently generating about -0.1 per unit of risk. If you would invest 922.00 in Barings Active Short on September 15, 2024 and sell it today you would earn a total of 3.00 from holding Barings Active Short or generate 0.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Barings Active Short vs. Legg Mason Global
Performance |
Timeline |
Barings Active Short |
Legg Mason Global |
Barings Active and Legg Mason Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barings Active and Legg Mason
The main advantage of trading using opposite Barings Active and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Active 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.Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Emerging Markets | Barings Active vs. Barings Active Short | Barings Active vs. Barings Global Floating |
Legg Mason vs. Angel Oak Ultrashort | Legg Mason vs. Prudential Short Duration | Legg Mason vs. Delaware Investments Ultrashort | Legg Mason vs. Barings Active Short |
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 Stocks Directory module to find actively traded stocks across global markets.
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