Correlation Between Legg Mason and Europacific Growth
Can any of the company-specific risk be diversified away by investing in both Legg Mason and Europacific Growth 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 Europacific Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason and Europacific Growth Fund, you can compare the effects of market volatilities on Legg Mason and Europacific Growth 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 Europacific Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and Europacific Growth.
Diversification Opportunities for Legg Mason and Europacific Growth
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and Europacific is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason and Europacific Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europacific Growth 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 are associated (or correlated) with Europacific Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europacific Growth has no effect on the direction of Legg Mason i.e., Legg Mason and Europacific Growth go up and down completely randomly.
Pair Corralation between Legg Mason and Europacific Growth
If you would invest (100.00) in Legg Mason on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Legg Mason or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Legg Mason vs. Europacific Growth Fund
Performance |
| Timeline |
| Legg Mason |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Europacific Growth |
Legg Mason and Europacific Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and Europacific Growth
The main advantage of trading using opposite Legg Mason and Europacific Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, Europacific Growth 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 Europacific Growth will offset losses from the drop in Europacific Growth's long position.| Legg Mason vs. RLX Technology | Legg Mason vs. Hertz Global Holdings | Legg Mason vs. Japan Tobacco ADR | Legg Mason vs. Diageo PLC ADR |
| Europacific Growth vs. Growth Fund Of | Europacific Growth vs. Washington Mutual Investors | Europacific Growth vs. American Funds Fundamental | Europacific Growth vs. New World Fund |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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