Legg Mason Bw Fund Volatility

LGOCX Fund  USD 8.58  0.03  0.35%   
Legg Mason Bw has Sharpe Ratio of -0.12, which conveys that the entity had -0.12% return per unit of risk over the last 3 months. Our standpoint towards estimating the risk of any fund is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Legg Mason exposes twenty-seven different technical indicators, which can help you to evaluate volatility embedded in its stock price that cannot be diversified away. Please verify Legg Mason's Mean Deviation of 0.4691, downside deviation of 0.7469, and Risk Adjusted Performance of 0.0143 to check out the risk estimate we provide. Key indicators related to Legg Mason's volatility include:
30 Days Market Risk
Chance Of Distress
30 Days Economic Sensitivity
Legg Mason Mutual Fund volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Legg daily returns, and it is calculated using variance and standard deviation. We also use Legg's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Legg Mason volatility.
  
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Legg Mason can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Legg Mason at lower prices. For example, an investor can purchase Legg stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Legg Mason's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving against Legg Mutual Fund

  0.7SAPCX Clearbridge AppreciationPairCorr
  0.5LGDCX Qs International DividendPairCorr
  0.5LGDAX Qs International DividendPairCorr
  0.42SAGCX Clearbridge AggressivePairCorr

Legg Mason Market Sensitivity And Downside Risk

Legg Mason's beta coefficient measures the volatility of Legg mutual fund compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Legg mutual fund's returns against your selected market. In other words, Legg Mason's beta of 0.62 provides an investor with an approximation of how much risk Legg Mason mutual fund can potentially add to one of your existing portfolios.
Legg Mason Bw exhibits relatively low volatility with skewness of 0.0 and kurtosis of 2.18. However, we advice investors to further investigate Legg Mason Bw to ensure all market statistics is disseminated and is consistent with investors' estimations about Legg Mason upside potential. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Legg Mason's mutual fund risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Legg Mason's mutual fund price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
3 Months Beta |Analyze Legg Mason Bw Demand Trend
Check current 90 days Legg Mason correlation with market (NYSE Composite)

Legg Beta

    
  0.62  
Legg standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  0.6  
It is essential to understand the difference between upside risk (as represented by Legg Mason's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Legg Mason's daily returns or price. Since the actual investment returns on holding a position in legg mutual fund tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Legg Mason.

Legg Mason Bw Mutual Fund Volatility Analysis

Volatility refers to the frequency at which Legg Mason fund price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Legg Mason's price changes. Investors will then calculate the volatility of Legg Mason's mutual fund to predict their future moves. A fund that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A mutual fund with relatively stable price changes has low volatility. A highly volatile fund is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Legg Mason's volatility:

Historical Volatility

This type of fund volatility measures Legg Mason's fluctuations based on previous trends. It's commonly used to predict Legg Mason's future behavior based on its past. However, it cannot conclusively determine the future direction of the mutual fund.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for Legg Mason's current market price. This means that the fund will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Legg Mason's to be redeemed at a future date.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. Legg Mason Bw Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.

Legg Mason Projected Return Density Against Market

Assuming the 90 days horizon Legg Mason has a beta of 0.6188 . This indicates as returns on the market go up, Legg Mason average returns are expected to increase less than the benchmark. However, during the bear market, the loss on holding Legg Mason Bw will be expected to be much smaller as well.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Legg Mason or Legg Mason sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Legg Mason's price will be affected by overall mutual fund market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Legg fund's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has a negative alpha, implying that the risk taken by holding this instrument is not justified. Legg Mason Bw is significantly underperforming NYSE Composite.
   Predicted Return Density   
       Returns  
Legg Mason's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how legg mutual fund's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives a Legg Mason Price Volatility?

Several factors can influence a fund's market volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

Legg Mason Mutual Fund Risk Measures

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Legg Mason or Legg Mason sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Legg Mason's price will be affected by overall mutual fund market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Legg fund's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision. Assuming the 90 days horizon the coefficient of variation of Legg Mason is -864.23. The daily returns are distributed with a variance of 0.36 and standard deviation of 0.6. The mean deviation of Legg Mason Bw is currently at 0.44. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 0.63
α
Alpha over NYSE Composite
-0.08
β
Beta against NYSE Composite0.62
σ
Overall volatility
0.60
Ir
Information ratio -0.19

Legg Mason Mutual Fund Return Volatility

Legg Mason historical daily return volatility represents how much of Legg Mason fund's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The fund shows 0.5985% volatility of returns over 90 . By contrast, NYSE Composite accepts 0.5953% volatility on return distribution over the 90 days horizon.
 Performance 
       Timeline  

About Legg Mason Volatility

Volatility is a rate at which the price of Legg Mason or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Legg Mason may increase or decrease. In other words, similar to Legg's beta indicator, it measures the risk of Legg Mason and helps estimate the fluctuations that may happen in a short period of time. So if prices of Legg Mason fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
The fund normally invests at least 80 percent of its net assets in fixed income securities of issuers located in developed market countries. It will invest in both investment grade and below investment grade fixed income securities, and the advisor intends to invest less than 35 percent of its net assets in below investment grade fixed income securities . The fund may invest up to 25 percent of its net assets in convertible debt securities. It is non-diversified.
Legg Mason's stock volatility refers to the amount of uncertainty or risk involved with the size of changes in its stock's price. It is a statistical measure of the dispersion of returns on Legg Mutual Fund over a specified period of time, often expressed as the standard deviation of daily returns. In other words, it measures how much Legg Mason's price varies over time.

3 ways to utilize Legg Mason's volatility to invest better

Higher Legg Mason's fund volatility means that the price of its stock is changing rapidly and unpredictably, while lower stock volatility indicates that the price of Legg Mason Bw fund is relatively stable. Investors and traders use stock volatility as an indicator of risk and potential reward, as stocks with higher volatility can offer the potential for more significant returns but also come with a greater risk of losses. Legg Mason Bw fund volatility can provide helpful information for making investment decisions in the following ways:
  • Measuring Risk: Volatility can be used as a measure of risk, which can help you determine the potential fluctuations in the value of Legg Mason Bw investment. A higher volatility means higher risk and potentially larger changes in value.
  • Identifying Opportunities: High volatility in Legg Mason's fund can indicate that there is potential for significant price movements, either up or down, which could present investment opportunities.
  • Diversification: Understanding how the volatility of Legg Mason's fund relates to your other investments can help you create a well-diversified portfolio of assets with varying levels of risk.
Remember it's essential to remember that stock volatility is just one of many factors to consider when making investment decisions, and it should be used in conjunction with other fundamental and technical analysis tools.

Legg Mason Investment Opportunity

Legg Mason Bw has the same returns volatility as NYSE Composite considering given time horizon. of all equities and portfolios are less risky than Legg Mason. Compared to the overall equity markets, volatility of historical daily returns of Legg Mason Bw is lower than 5 () of all global equities and portfolios over the last 90 days. Use Legg Mason Bw to protect your portfolios against small market fluctuations. Benchmarks are essential to demonstrate the utility of optimization algorithms. The mutual fund experiences a normal downward trend and little activity. Check odds of Legg Mason to be traded at $8.49 in 90 days.

Very weak diversification

The correlation between LEGG MASON BW and NYA is 0.58 (i.e., Very weak diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding LEGG MASON BW and NYA in the same portfolio, assuming nothing else is changed.

Legg Mason Additional Risk Indicators

The analysis of Legg Mason's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Legg Mason's investment and either accepting that risk or mitigating it. Along with some common measures of Legg Mason mutual fund's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential mutual funds, we recommend comparing similar funds with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Legg Mason Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Legg Mason as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Legg Mason's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Legg Mason's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Legg Mason Bw.
Check out Correlation Analysis to better understand how to build diversified portfolios, which includes a position in Legg Mason Bw. Also, note that the market value of any Mutual Fund could be tightly coupled with the direction of predictive economic indicators such as signals in main economic indicators.
Note that the Legg Mason Bw information on this page should be used as a complementary analysis to other Legg Mason's statistical models used 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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When running Legg Mason's price analysis, check to measure Legg Mason's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Legg Mason is operating at the current time. Most of Legg Mason's value examination focuses on studying past and present price action to predict the probability of Legg Mason's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Legg Mason's price. Additionally, you may evaluate how the addition of Legg Mason to your portfolios can decrease your overall portfolio volatility.
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Please note, there is a significant difference between Legg Mason's value and its price as these two are different measures arrived at by different means. Investors typically determine if Legg Mason is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Legg Mason's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.