Correlation Between Legg Mason and OPC Energy
Can any of the company-specific risk be diversified away by investing in both Legg Mason and OPC Energy 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 OPC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legg Mason and OPC Energy, you can compare the effects of market volatilities on Legg Mason and OPC Energy 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 OPC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legg Mason and OPC Energy.
Diversification Opportunities for Legg Mason and OPC Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Legg and OPC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Legg Mason and OPC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPC Energy 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 OPC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPC Energy has no effect on the direction of Legg Mason i.e., Legg Mason and OPC Energy go up and down completely randomly.
Pair Corralation between Legg Mason and OPC Energy
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. OPC Energy
Performance |
| Timeline |
| Legg Mason |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| OPC Energy |
Legg Mason and OPC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legg Mason and OPC Energy
The main advantage of trading using opposite Legg Mason and OPC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legg Mason position performs unexpectedly, OPC Energy 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 OPC Energy will offset losses from the drop in OPC Energy's long position.| Legg Mason vs. BioNTech SE | Legg Mason vs. Harmony Gold Mining | Legg Mason vs. US GoldMining Common | Legg Mason vs. HUTCHMED DRC |
| OPC Energy vs. Energix Renewable Energies | OPC Energy vs. Doral Group Renewable | OPC Energy vs. Elbit Systems | OPC Energy vs. Electreon Wireless |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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